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Yellen’s Feminist Triumph Threatens Your Economic Future: McCullough

Yellen’s Feminist Triumph Threatens Your Economic Future: McCullough

"Yellen Poised to Rival Obama With Financial Power," screams Monday morning's Bloomberg headline. If you were expecting a story about Sen. Rand Paul's threats to block President Obama's nomination of Janet Yellen to replace Ben Bernanke as Fed Chair, you were sorely mistaken. The Bloomberg story is yet another in a long line of essays on what it would mean for the FOMC to be run by a woman for the first time in its 100-year history.

"I don't know if I should smile or kind of puke when I think about that," says Hedgeye CEO Keith McCullough in the attached clip. He says the issue of who becomes head of the FOMC has nothing to do with gender. "We've completely lost touch with where we are in terms of the Constitution, principles of the country, or whether or not the Fed should have a certain amount of unaccountable or unelected control."

Related: Why Janet Yellen Means Easy Money Is Here to Stay

By McCullough's and most other accounts, the Fed is to be blamed or credited with controlling the prices of almost all assets over the last six years through Quantitative Easing, Operation Twist, and all other forms of economic stimulus. How Yellen or anyone else goes about unwinding this unprecedented stimulus will do much to determine our economic destiny as a nation.

This isn't an academic debate. The choices made by Bernanke's replacement will hit you in the wallet. Here's a partial list of things that are influenced by the policies of the FOMC:

  • Your mortgage rate
  • What you pay for everything, from your car loans to groceries
  • Employment growth
  • Whether the all-time-highs in stocks are masking a collapse in economic growth
  • The chances that the slowest economic recovery since the end of World War II continues or tips back into recession

Last summer the mere threat of Obama pushing for Larry Summers as Fed Chair — one less apt to support more unfettered stimulus — sent bond rates higher and stocks lower. Since Summers withdrew his name from contention making Yellen the presumptive Fed Chair once again, the S&P 500 (^GSPC) has gone up nearly 5% and the interest rate on a 10-year (^TNX) note has dropped from 2.8% to 2.51%.

These are huge moves based on policy, not gender. The FOMC was never intended to have so much control over your economic destiny. Yellen becoming Fed Chair would be a triumph of gender equality. Placing her gender ahead of her policies distracts the country from the most important issue facing our economy for the next 20 years.

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