Former Treasury Secretary Larry Summers should be at least a little relieved he’s not getting the job.
Sunday’s surprise announcement that he was out of the running as the next Federal Reserve chairman stunned Washington and Wall Street after an unprecedented round of press speculation and behind-the-scenes lobbying. The move leaves Janet Yellen—current vice chair and former White House economist in the Clinton administration—as the likely, but far from certain, nominee.
Whoever is tapped to take the helm of the world’s largest and most powerful central bank, whether it’s Yellen or someone else, will have to sail the Fed into uncharted, and increasingly perilous, waters five years after the global economy was torpedoed by the bursting of a reckless credit bubble.
After bloating its balance sheet with more than $3 trillion in bonds to suppress interest rates to near zero, the central bank’s efforts so far have produced one of the weakest economic recoveries in its 100-year history.