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Washington takes sides ahead of Obama's Fed bank pick

The seal of the Federal Reserve Board of Governors during a press conference on June 19, 2013 in Washington, DC

As US President Barack Obama narrows his choices to head the Federal Reserve, focus in Washington has centered on two brilliant economists with divergent styles -- both said to be top contenders for the powerful post.

Fed Chairman Ben Bernanke is widely expected to retire when his current term ends in January, relinquishing a post seen not only as one of the most influential in the US capital, but the entire world.

With a mere word, the head of the US central bank can send global financial markets into a tailspin and US homebuyers scurrying to refinance their mortgages.

Obama's former White House economic adviser, Lawrence Summers, 58, widely tipped as one of two front-runners to succeed Bernanke, also served as Treasury secretary under President Bill Clinton.

The other top contender, Janet Yellen, 66, currently the Fed's vice chairwoman, also was a Clinton adviser and is a former president of the Federal Reserve Bank of San Francisco.

The White House has been mum about Bernanke's possible successor. Without tipping his hand, Obama told the New York Times in an article published Sunday that he will announce his pick in "the next several months," and that he has settled upon "some extraordinary candidates" for the position.

The president said his Fed nominee would act "in service of the lives of ordinary Americans getting better."

Former US Treasury Secretary Lawrence Summers speaks during an event at the London School of Economics on March 25, 2013
Former US Treasury Secretary Lawrence Summers speaks during an event at the London School of Economics on March 25, 2013. Also Obama's former White House economic adviser, Summers is widely tipped as one of two front-runners to succeed Bernanke.

"I want a Fed chairman that can step back and look at that objectively and say, 'Let's make sure that we're growing the economy,'" Obama told the daily.

The administration's refusal to confirm who is in the running for the post has not stopped Washington's political establishment from taking sides, however.

According to news reports, one-third of the US Senate's 54 Democratic members have signed a letter urging Obama to nominate Yellen to the post.

"She's very well thought of. She knows the Fed, and she's highly qualified," Senator Dianne Feinstein told CNN's "State of the Union" program on Sunday.

A loyal ally of Bernanke's since joining the Fed Board of Governors, Yellen is seen as the candidate most likely to continue the policies Bernanke has adopted during his tenure.

Treasury Secretary Jack Lew on Sunday would not be drawn on the Yellen vs. Summers debate.

"They're both friends, and I have great admiration for both of them," he told CNN.

"I'm going to keep the conversation about any future decisions here where it belongs, which is in "the privacy of the Oval Office."

Lew added: "Chairman Bernanke has been an extraordinary Fed chairman. He will be remembered... as somebody who did a great deal to save the US and the world economy."

Many experts say either Yellen or Summers would be a worthy Bernanke successor, but each has opponents.

US Federal Reserve Vice Chair Janet Yellen speaks at a international monetary conference in Shanghai on June 3, 2013
US Federal Reserve Vice Chair Janet Yellen speaks at a international monetary conference in Shanghai on June 3, 2013. Yellen is considered one of the top contenders to head the Federal Reserve.

Summers' detractors fault his handling of the early days of the Great Recession and global economic crisis, including his thrust on remedies involving deregulation and short sales that seemed for some too much in keeping the standard pro-Wall Street way of doing things.

Summers also is seen by some as irascible and somewhat intemperate -- in part because of controversial remarks made in 2005 while he served as president of Harvard University.

Those comments, made during a speech, were interpreted as suggesting that women may be less capable of success than men at the highest levels in math and the sciences.

The remarks ignited a firestorm and Summers eventually was forced to resign amid eroding support from the university's governing board and a no-confidence vote from the faculty.

Yellen is viewed as a more mild-mannered figure -- which her detractors say is precisely the problem.

They fault her as having a milquetoast personality which may not lend itself to the daily rough-and-tumble side of one of Washington's most high-stress and high-profile jobs.

But boosters like Feinstein point out that as a woman, Yellen's appointment would be historic -- one more reason, they say, to put a finger on the scale in her favor.

"A woman as head of the federal reserve, a qualified woman, would be a very positive thing for this administration," the Democrat told CNN.

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