President Barack Obama hasn’t decided yet who should succeed Federal Reserve Chairman Ben Bernanke, but for Anthony Chan, chief economist at Chase Private Client, the clear choice is Fed Vice Chair Janet Yellen.
“Given the fact that Janet Yellen has been in the game for all the innings so far, and certainly has been privy to the debates and all the pros and cons as the Federal Reserve has gone from one quantitative easing program to another, I have to believe that she has the edge,” he told “Nightly Business Report.”
Both Yellen and former Treasury Secretary Lawrence Summers are frequently mentioned as top contenders for the position. President Obama told The New York Times in an interview released over the weekend that he has narrowed his choices and will announce his selection over the next several months. Bernanke’s term ends in January.
Chan said he isn’t alone in favoring Yellen and that he believes she’s also Wall Street’s preference because of her stance on unemployment.
“Given that her inclination is more toward unemployment and given that Bernanke was more obsessed with inflation, the market is going to be favoring Janet Yellen because it says that the Federal Reserve is likely to keep the punch flow in play a lot longer than under someone else,” he said.
(Read more: The Fed’s Hawks and Doves)
CNBC’s Fed Survey for July also shows Yellen as the Street’s favorite candidate. According to the survey, half of the 40 respondents believe Yellen should get the job and 12.5 percent said the president should reappoint Bernanke. Summers captured 2.5 percent of the vote.
When it comes to who Obama will actually chose, 70 percent believed that Obama would pick Yellen. However, separately, there is speculation that Summers has the inside track.
According to The New York Times article, the president would like a Fed chairman who understands the importance of keeping inflation in check. Yellen has said in the past that the primary focus of the Fed should be reducing unemployment.
There is also Summers’ relationship with the president to take into account.
“The edge that Larry Summers has that Ms. Yellen doesn`t have is that he`s a lot more comfortable, I would say, with the president,” Chan said. “He`s had a lot more social and intellectual contact with the president, whereas Janet Yellen has basically remained on the sidelines.”
Though both “are intellectually capable of adjusting,” Chan said, he added that he would have to give the nod to Yellen.
“It`s clear that from the Federal Reserve`s perspective and the experience of someone as a central banker, Janet Yellen has to lead the pack and Larry Summers has to be a distant second in that race,” he said.