President Obama has finally seen the light and agreed to nominate Janet L. Yellen as Fed Chair. Sen. Corker of TN is against her, but otherwise it looks like she has overwhelming support in the Senate and will be confirmed quite easily. Futures on stock markets are up despite falling sharply today as it increasingly looks like not only might the shutdown get fail to get solved soon, but there might actually be a default by the US government. Although Obama is reportedly saying that this decision had nothing to do with the current budget crisis, word of it has sent futures on the stock market upwards, although that will probably get quickly reversed if there continues to be no resolution. In any case, it takes one element of uncertainty off the table in a period of sharply rising uncertainty, with the VIX having risen over 50% since Sept. 20.
As it is, that old Chinese curse holds, "May you live in interesting times." It may well be that if there is a failure to raise the debt ceiling or otherwise get around it with a major financial crisis ensuing, it will hit while Bernanke is still officially in charge. But clearly Yellen will be faced with having to deal with the cleanup of the mess that will ensue. While one can poke at this or that aspect of her views, there is no doubt that she is as qualified and capable as any potential Fed Chair to handle these potential upcoming "interesting times" as anybody else out there, with her excellent track record of forecasting as documented by the Wall Street Journal encouraging in this respect. In any case, whatever anybody thinks of her, we all should wish her the very best in dealing with these "interesting times," which threaten to get just all too interesting in the near future.
BTW, I cannot resist reminding one and all for the record that I was the first person on the planet to publicly call for her to be appointed as Fed Chair, and I did it all the way back in July, 2009 right here on Econospeak. So I am pleased to pat myself on the back publicly in seeing my long ago request finally being fulfilled. Of course, I must applaud it, :-).