Janet Yellen as new Fed Chief

Should Janet Yellen be confirmed by the Senate she will become the next Fed Chief and the first female to head that post. I think she is a bad choice, but of course our personal opinions about her do not matter at all. She has admitted that she did not see the risks in the financial system until AFTER the collapse and Great Recession and she is a dove which means she does not really care about inflation and is more concerned with the unemployment rate.

Do we really want someone like her playing around with monetary decisions?

This should lead to a continuation of current policies which means that the USD will continue to deteriorate while interest rates will remain low (I also think unemployment will remain high). Janet Yellen and the forex market will have to get along one way or the other.

I am looking forward to when she takes over to see how often she will fumble the ball and stir volatility in financial markets.

I agree that everyone has their faults, but if we wanted to play fair then, I suppose, we would also have to hear
what exactly would have been so marvellous about a Lawrence Summers in charge… or anyone else, for that matter.

We believe the Fed-chief to be all-important, but, without taking away their commanding prestige, they do not single-handedly control price action: why, if only stirring volatility were so simple, it would already have been done by the former Fed chiefs!

The truth is that volatility is good for FX trading, but too much of it is bad for governments: countries need a stable economy, so it computes that a new Fed chief who has a certified appetite for stability is actually, in the current US economy, viewed favourably, as it gives the government the stability it needs to carry out its economic plan to stimulate recovery.

Remembering the Japanese scenario, it is clear that, in the US as in the Asian counterpart, monetary policy is an aid to financial policy, but cannot heal the economy by itself: no amount of QE or “stirring volatility” can, in the end, heal a country’s recovery if it is not accompanied by sound policies in social, economic, and labour improvement.

To finish, I would like to say that we should be welcoming of Janet Yellen’s swearing in as the first female President of the United States’ Federal Reserve Bank: have we ever asked ourselves why girls growing up end up wanting to give up on their ambitions? It is precisely women like Yellen who can give young women a role model, someone who has earned respect with professionalism and intelligence; just to mention that Yellen was an assistant professor at Harvard University at the age of twenty-five should speak volumes about her calibre - but I digress.

The fact that Yellen deserves our support is not that she is of her gender but, rather, that she has been chosen by Obama to succeed Bernanke, and, therefore, she is now the one to whom we will turn for guidance about the Fed’s future; as such, she must now be given support to get on with her job to do one of the world’s hardest jobs.

And if you really want some light relief, I give you this article:
Daily Kos: Handy comparison chart: Janet Yellen vs. Larry Summers

Enjoy!
Happy trading.

I agree that everyone has flaws and I did not want to suggest that Summers would have been far better, but there is a reason he was the first choice. In general I think Bernanke is terrible, and Yellen will continue down the same path. I also agree that volatility is good for traders, but I disagree that because Yellen was chosen she deserves the support of anyone. She needs to earn that and I think she will fail horribly at her job.

Hi Rambo

How can you say that she will fail horribly so early!I am hopeful rather.

Knowing her history, background and point of view is what lead me to believe she will fail at least as bad as Bernanke failed. Of course the definition of failure may differ and most think Bernanke did a great job and saved the financial world. I disagree and think when the dust settles people will realize that he harmed the system long-term.

Is that reflecting in the forex market? As we have seen today!

Indirectly yes, the USD sold off as more and more realize that the Fed is not going to taper and QE will stay with us for decades which means the Fed will keep printing money and devalue the USD.

I gotta say I do agree with this view! With the weak September NFP (plus a very likely weak October NFP), analysts say that the earliest possible taper is by March next year. That’d be under Yellen’s watch and given how she’s very concerned about the unemployment rate, I don’t think we’ll even see a taper until the second half of the year. Just my two cents though!

I would not be surprised to see an increase in QE3, rather than a decrease.