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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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President Nominates Janet Yellen as Fed Chair - What It Means to Savers


President Nominates Janet Yellen as Fed Chair - What It Means to Savers

President Obama has just nominated Janet Yellen to replace Ben Bernanke as the next Fed chair for early next year. She will still have to be confirmed by the Senate, but it’s unlikely that the Senate will block the confirmation.

This nomination isn’t good news for savers who want to see the Fed end its zero interest rate policy (ZIRP). Many believe Yellen is more of an inflation dove than Bernanke. In summary, she’s more concerned with unemployment than with inflation. According to this New York Times article:

Ms. Yellen’s intellectual roots and leadership style both suggest that she would push somewhat more forcefully than Mr. Bernanke to extend the Fed’s stimulus campaign, according to a careful review of her career and interviews with more than two dozen colleagues and acquaintances.

She has expressed greater concern about the economic consequences of unemployment, a stronger conviction in the Fed’s ability to stimulate job growth and a greater willingness to tolerate a little more inflation in order to reduce unemployment more quickly.

With Yellen as the next Fed chair, the FOMC may be influenced to wait longer to taper its bond purchases and to raise rates. However, Yellen does have some history showing that she will fight against excessive inflation. This Washington Post article points out that “she's more than willing to crack down on inflation when the situation requires it.” Hopefully, her inflation dovish attitudes will moderate.

The best hope for savers is that the U.S. economy improves which allows even the inflation doves to support ending ZIRP. However, with the fiscal policy risks coming from Washington, economic improvements may continue to be slow. So ZIRP could continue for a long time.

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