Summers bows out; Yellen front-runner for Fed chair

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Lawrence Summers withdrew his name from consideration to lead the Federal Reserve in a Sunday letter to the president.

President Barack Obama had been considering Summers and UC Berkeley professor emerita of economics at the Haas School of Business Janet Yellen to replace Ben Bernanke as chair of the Fed.

Yellen, now the front-runner for the position, would be both the first female and first UC Berkeley professor to serve in the position.

Previously, Yellen served as president and CEO of the Federal Reserve Bank of San Francisco from 2004 to 2010. Currently, Yellen is vice chair of the Board of Governors of the Federal Reserve System. She was also chair of President Bill Clinton’s Council of Economic Advisers.

Yellen graduated from Brown University in 1967 with a degree in economics. She holds a doctorate in economics from Yale University, which she received in 1971.

At UC Berkeley, Yellen served as a macroeconomics professor at Haas, beginning in 1980. In 1985 and 1988, Yellen received the school’s Earl F. Cheit Award for Excellence in Teaching.

“In the realm of plausible candidates, she is by far the best,” said Christina Romer, a UC Berkeley economics professor and a former chair of Obama’s Council of Economic Advisers, in a New York Times article.

Summers, previously Secretary of the Treasury, director of the National Economic Council and president of Harvard University, was also being considered by the president as a replacement for Bernanke.

“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interest of the nation’s ongoing economic recovery,” Summers said in his letter to the president Sunday.

Earlier Sunday, the president spoke with Summers about his decision to withdraw from consideration for the chair position.

“Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today,” the president said in a statement. “I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future.”

It is expected that the president will nominate someone to the position sometime this fall — as early as this month. Summers’ withdrawal is expected to delay any announcement for at least a week, CNN reported.

Megan Messerly is a news editor. Contact her at [email protected] and follow her on Twitter @meganmesserly.