Janet Yellen—the Federal Reserve’s No. 2—should be easily confirmed as the new chair, two former Fed economists told CNBC on Wednesday.
“She has the knowledge, the experience. She has worked both on the administration side, which is the real economy as well as on the monetary side at the central bank,” former economist at the Fed Catherine Mann said in a “Squawk Box” interview.
“This is a global economy,” Mann said. “She knows all the central bankers around the world. She can pick up the phone and talk to them. And that’s real really important.”
Yellen knows how to do the job, said Kevin Hassett, another former Fed economist, who appeared with Mann on the show. “She’s got her own opinion, especially if you look at the minutes. She’s in there pushing her point of view. She’s a feisty lady.”
Ending months of speculation, President Barack Obama will announce Yellen as Fed Chairman Ben Bernanke’s successor in the afternoon, an hour after the central bank’s 2 p.m. EDT release of the minutes from its meeting in September, when policymakers surprised Wall Street by not tapering their $85 billion monthly bond-buying program.
“When Bernanke didn’t start the taper a few weeks ago, I thought maybe this is Yellen talking. But it’s unbelievable that he’d tee the markets up like they did in May,” said Mark Okada, co-founder and CIO of Highland Capital, which has $18 billion in assets under management.
U.S. stock futures traded higher Wednesday on the Yellen news, which came after the stock market closed Tuesday—too late to save the Dow Jones Industrial Average from finishing at a six-week low with no visible progress on ending the government shutdown or addressing the need to increase the debt ceiling ahead of next week’s deadline.
“I think her one weak point, … quantitative easing, is pretty unpopular in some circles,” said Hassett, director of economic policy studies at the American Enterprise Institute. Yellen has led the way on the Fed’s transparency strategy, which Hassett views as a positive for communicating the central bank’s intentions.
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