WASHINGTON (Reuters) - President Barack Obama said on Friday that Lawrence Summers and Janet Yellen were both highly qualified to be the next chair of the U.S. Federal Reserve, but stressed that there was a “range of outstanding candidates” for this vital job.
“Frankly, I think both Larry Summers and Janet Yellen are highly qualified candidates. There are a couple of other candidates who are highly qualified as well. I’ll make the decision in the fall,” he told a press conference.
The term of current Fed Chairman Ben Bernanke expires on January 31, 2014 and Obama’s remarks made quite clear that he will not serve a third term, even though Bernanke has not said anything in public about his future plans.
Summers, a former top Obama economic advisor, has come to be viewed as the leading contender for the job, but the president insisted that he had not made up his mind.
“I think the perception that Mr Summers might have an inside track simply had to do with a bunch of attacks that I was hearing on Mr Summers preemptively - which is sort of the standard Washington exercise - that I don’t like,” Obama said.
The president has spoken behind closed doors in defense of his former White House National Economic Council director after around 20 Democratic senators signed a letter that was sent to him in support of Yellen as the next Fed chief.
Obama also spelled out that whoever gets the job ought give equal weight to tackling inflation as to seeking full employment, the two sides of the central bank’s dual mandate, but he argued that unemployment was currently the more pressing concern.
“Right now, if you look at the biggest challenge we have, the challenge is not inflation. The challenge is we’ve still got too many people out of work, too many long-term unemployed.”
Obama also talked about the need for a sound dollar, which was how Summers frequently talked about the U.S. currency while he was U.S. Treasury Secretary under President Bill Clinton.
Yellen is viewed as somewhat more dovish in her monetary policy preferences than Summers, in terms of how she would weigh the need to keep inflation in check versus run a relatively looser monetary policy that would generate more employment.
On the other hand, the substantive monetary policy differences between them are not seen as terribly large.
Reporting by Alister Bull and Jeff Mason