The top two candidates to replace the money printer in chief (Federal Reserve Chairman Ben Bernanke) next January are former Treasury Secretary Larry Summers and Fed Vice Chair Janet Yellen. Both would of course be low on our list, but all indications in our view are that the less bad and less dovish option is Larry Summers.
Some quotes from Summers:
“QE in my view is less efficacious for the real economy than most people suppose,”
“If we have slow growth, we are not going to keep thinking that 5.5 per cent unemployment is normal. We are going to decide rightly or wrongly that the potential of the economy is less and therefore we are going to decide that we are closer to that potential and that is going to operate in favor of suggesting that we should normalize interest rates.”
“I think the market is underestimating the pace at which the Fed will alter its current course and the consequences of that for interest rates.”
