Divyang Shah, Senior IFR Strategist
Obama said Ben Bernanke had stayed “a lot longer than he wanted or he was supposed to” and seems to add weight to the speculation that Bernanke will not seek another term as chairman.
At the front of the queue for possible replacement is Janet Yellen who is the current vice-chairman of the Fed.
A replacement at the top of any institution always brings with it challenges for the market but it seems likely that just as we got used to Alan Greenspan after Paul Volcker, and Bernanke after Greenspan we will also get used to most likely Yellen after Bernanke.
There is a suspicion that committee members are attempting to position themselves for the role of vice-chairman should Yellen jump into the seat of chairman.
Thus, the Fedspeak we have had of late, from various FOMC members, could be a little tainted and thus raising the importance of the message that follows the FOMC meeting.
