One of the key selling points of Larry Summers to the Fed was his supposed support on Wall Street. Ezra Klein from a couple of days ago:
There’s also a feeling that the chair of the Federal Reserve can do more if he or she is truly trusted by markets. Rightly or wrongly, there’s a sense that Summers has the market’s trust in a way Yellen doesn’t.
Maybe not. Maybe it’s just the opposite. From CNBC:
Wall Street overwhelmingly believes President Obama will and should pick Janet Yellen to be the next chairman of the Federal Reserve, according to a survey. Preliminary results of the CNBC Fed Survey for July show 70 percent of the 40 participants who responded believe Obama will pick Yellen, currently, the Fed’s vice chair, to replace current Chairman Ben Bernanke, whose term is up in January. Just 25 percent believe it will be the former Treasury Secretary Larry Summers.
Yellen also beats Summers when CNBC asks participants who the president should nominate, with 50 percent choosing Yellen and 12.5 percent saying he should reappoint Bernanke. Even write-in candidate John Taylor, the Stanford University president, beats out Summers on who the president should nominate.
So Wall Street expects Yellen and wants Yellen. Markets are, yes, yellin’ for Yellen. I’m not sure when this survey was taken, but investors probably didn’t like hearing about Summers’ QE skepticism, as reported in the FT.