"Usually, the Fed chairman comes in with a clean slate to do whatever they want"
-Michael Feroli, chief U.S. economist at JPMorgan Chase & Co.
The U.S. President Barack Obama said last Monday that the Fed's Chairman Ben S. Bernanke stayed in his position much longer than he wanted or was supposed to. Two days after that Bernanke made an announcement that the Fed might scale back its bond-buying programme, known as quantitative easing, later this year and even end it around the middle of 2014. Putting these two developments together, it seems that Bernanke's days are numbered and soon another person will become a new Fed's Chairman. Assuming Bernanke is leaving, Barack Obama is likely to appoint someone whose views are not completely different.
Under Bernanke's leadership, the Federal Reserve has set out clear markers for the conditions that are needed to be achieved to taper and later end its asset-purchase programme, and afterwards start increasing interest rates. In order to ensure a smooth landing, the Fed should carefully decrease the pace of monthly purchases without letting inflation to fall considerably, while even the hint of increased borrowing costs can add a significant turbulence in the market and send the Dollar ever higher. Bernanke's second four-year term ends on January 31, and one of the leading contenders at this position is the current vice chairman Janet Yellen, who has already led a subcommittee on the FOMC.
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