Skip to content
Subscriber Only
Matthew C Klein

The Fed Is Not a Clown Show

Even the most qualified chairman will have a tough time overcoming the significant divisions separating members of the Federal Reserve.

Janet Yellen has finally been nominated to serve as chairman of the Federal Reserve. That may make her the world's most powerful woman, although she will be only one member of a committee of independent-minded central bankers. The Wall Street Journal's thorough account of the Fed's internal debates this year reveals that the rest of this committee has significant influence.

According to the Journal, several members of the Federal Open Market Committee, which sets monetary policy, became concerned that the prospect of unlimited asset purchases was distorting financial markets. Starting in the spring, these members, led by Jeremy Stein, a Harvard professor appointed by President Barack Obama, mounted a campaign to begin tapering the Fed's bond buying before the end of the year.