Yellen Is Great News for These ETFs
Zacks Investment Research | Oct 11, 2013 07:20AM ET
After the plan to install Larry Summers as the next Fed Chairman fell through, many gravitated around the next obvious choice—and the frontrunner for some all along—Janet Yellen. As the current Fed Vice Chairwoman, Janet Yellen was seen as a natural pick as the follow up to Bernanke, and someone that wouldn’t rock the boat too much (unlike Summers).
Thanks to this, it doesn’t come as much of a surprise that President Obama has nominated Yellen to take the top job at the Federal Reserve. And should she pass the confirmation process, many are speculating that she will keep Bernanke’s easy money policies intact, making for a smooth transition.
That is because Yellen is seen as a huge supporter of QE programs, and most believe that she will have a dovish take on policy (much like the current chairperson). As such, many are expecting QE to take quite some time to wind down under a Yellen-led Federal Reserve, suggesting that we could see long periods of low rates if she passes the Senate confirmation process.
Market Impact
While markets reacted favorably initially to the report, there was also a lot of other market noise on the day. There were concerns over budgetary negotiations, while there are also worries that there might actually be the start of the taper this year after all. Both of these issues spooked markets on the session, and definitely stole the show from the Yellen announcement.
Still, over the long term, a Yellen Federal Reserve could act as a boost to markets, and help to keep the status quo intact. While many might not be happy with this, it will definitely help stocks in the long run, assuming of course she sticks to a robust-QE program should she take the reins from Bernanke (see Original post
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