News Column

Who Will Be the Next Fed Head?

August 2, 2013

Staff Reports -- HispanicBusiness.com

federal reserve chair
Lawrence Summers and Janet Yellen are considered top candidates to chair the Fed.

There's been little more than speculation out of Washington about who will be the next head of the Federal Reserve when Ben Bernanke's term expires in January, but the choices are raising some hackles. The heir apparent is Lawrence Summers, with Janet Yellen as second choice.

Ms. Yellen, 66, is vice chairwoman of the Board of Governors of the Federal Reserve System, while Mr. Summers, 58, served as Treasury secretary under President Clinton.

Word that President Obama is leaning toward Mr. Summers over Ms. Yellen came as a surprise on Capitol Hill, according to Beltway bloggers. Mr. Summers was an ardent supporter of Ms. Yellen back in the days before they were put in contention for the job, Bloomberg reported.

Mr. Summers' detractors mention that perhaps he isn't all that tough when it comes to keeping banks out of the ditch, while Ms. Yellen's opponents say she hasn't done much to contain inflation, according to Bloomberg.

Although the president has said the next head of the Fed will need to keep inflation in check while promoting employment, he has yet to announce a candidate for the job.

"What I'm looking for is somebody who understands the Fed has a dual mandate, that that's not just lip service, that it is very important to keep inflation in check, to keep our dollar sound, and to ensure stability in the markets," he told the New York Times.

Both candidates favor the current Fed policy of keeping interest rates low and goosing the economy by buying bonds -- and keeping things that way till the country sees a significant drop in unemployment.

Unemployment numbers released on Friday showed mild improvement overall, though Hispanic unemployment saw a slight rise.

Related: Hispanic Unemployment Rate Rose in July


Opposition to Mr. Summers is marked on the Hill, so much so that nearly half of the Democrats in the Senate wrote the president a letter in support of Ms. Yellen.

The president's picks include Timothy Geithner, who was Treasury secretary till January of this year, and president of the New York Fed before that.

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Find out which U.S. Hispanic-owned companies are up and which are down on the 2013 HispanicBusiness Fastest-Growing 100 overview.


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