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Wall Street gets who it wants, just not who it expected

Wall Street looks set to get who it wants as Federal Reserve chairman, but definitely not who it expected.

The CNBC September Fed Survey, conducted Thursday and Friday, found Wall Street participants by a 2-to-1 margin believed President Barack Obama would nominate former Treasury Secretary Larry Summers to be the next Fed Chairman.

But by about a 5-to-1 margin, they wanted current Vice Chairwoman Janet Yellen to accede to the top post over Summers.

(Read more: Get ready for a Summers rally in the stock market)

That is not apparently to be. In a surprise announcement on Sunday, Summers, the presumed frontrunner, told President Obama he no longer wanted to be considered for the job. Summers, who was strongly opposed by some Democrats on the left, cited the high political price the president might have to pay for the nomination to succeed.

(Read more: Summers withdraws his name for Fed chair)

Markets Sunday evening were adjusting their expectations toward their No. 1 choice, who they expected to finish second in the running. Equities rallied on the belief that the more dovish Yellen would now be chosen by Obama.

Among the reasons for the preference of Yellen over Summers: The survey of 47 top economists, Wall Street strategists and investment managers found that most perceived Summers to be more hawkish than Yellen—that is, they believed he would be less likely to continue the current easy monetary policy of current Chairman Ben Bernanke.

The survey found that participants believed Yellen was substantially more concerned about unemployment than Summers, and that Summers had greater concern about inflation.

But Wall Street's concerns over Summers appeared to go beyond just the worry that he would not support Bernanke's policies. CNBC asked respondents to judge three candidates—Summers, Yellen and former Vice Chairman Donald Kohn—alongside Bernanke on 10 separate qualifications for the job.

Market participants gave Bernanke the highest overall score. Yellen came in a close second. But even Kohn beat Summers, who finished last among the four in the eyes of Wall Street.

Yellen had higher scores than Summers in eight of the 10 categories. Most strikingly, market participants gave Yellen much higher marks for monetary policy expertise than Summers. They also felt she had superior political and communications skills, a persistent knock on Summers.

Yellen, according to Wall Street participants, even beat out Summers on her ability to manage a financial crisis, the area that Obama apparently held out as one of Summers most important qualities.

Yellen was also seen having more respect from financial markets and banking regulatory expertise. Summers beat out Yellen in only two categories: concern about inflation and financial market expertise.

By CNBC's Steve Liesman