President Barack Obama said on Sunday that he accepted Lawrence Summers’ decision to withdraw from consideration for the role of Chairman of the Federal Reserve.
According to Obama, Summers was a critical member of his economic team and says he is grateful for his service on behalf of the country.
Summers was a leading candidate to replace current Fed Chairman Ben Bernanke but faced opposition from Democrats as well as Republicans.
Summers faced a difficult confirmation had he been appointed. Some Democratic members of Congress view him with suspicion, believing that the former Treasury Secretary (under Bill Clinton) with extensive Wall Street ties helped contribute to the financial crisis.
Among economists and Wall Street analysts, Federal Reserve Vice Chairman Janet Yellen is the preferred choice. Most analysts expect Yellen to continue Bernanke’s dovish views on the economy and the controlled tapering of quantitative easing.
Former Fed Vice Chairman Donald Kohn is also a leading candidate, according to the Washington Post.
The Fed Chairman is arguably the most powerful figure in global finance and economics. In the past two weeks, the U.S. stock market had become volatile due to concerns that Summers—whose irascible demeanor doesn’t lend well to the position of economic shepherd—became the frontrunner to replace Bernanke.
At stake are the current economic recovery and the U.S. bull market.
The U.S. official unemployment rate decreased to 7.3 percent last month, and the economy added 169,000 new jobs. The Dow Jones Industrial Average has gained 17 percent year-to-date, and the S&P 500 Index rose 18 percent during the same period.
The Associated Press contributed to this report.
