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16 Sep 2013
Flash: Dollar gaps lower as Summers withdraws from Fed race – DailyFX
FXstreet.com (Córdoba) - Christopher Vecchio, Currency Analyst at DailyFX commented on the Larry Summers withdrawal from the race to head the Fed - leaving Janet Yellen as the clear front-runner for the job - and its effects on the USD.
Key Quotes
"There has been a growing belief that if Larry Summers, reportedly President Obama’s preferred choice, were to take over the Fed, monetary policy would tighten given Mr. Summers’ belief that fiscal stimulus (government spending) is more effective than the Fed’s recent non-standard monetary stimulus (QE)".
"Furthermore, market participants consider Ms.Yellen to be more dovish than Chairman Bernanke; and so the aggregate impact of Mr. Summers announcing that he would withdraw his name from consideration has the markets pricing out a hawkish chairman and pricing in a dovish chairwoman in the very near-term".
Key Quotes
"There has been a growing belief that if Larry Summers, reportedly President Obama’s preferred choice, were to take over the Fed, monetary policy would tighten given Mr. Summers’ belief that fiscal stimulus (government spending) is more effective than the Fed’s recent non-standard monetary stimulus (QE)".
"Furthermore, market participants consider Ms.Yellen to be more dovish than Chairman Bernanke; and so the aggregate impact of Mr. Summers announcing that he would withdraw his name from consideration has the markets pricing out a hawkish chairman and pricing in a dovish chairwoman in the very near-term".