Summers as Fed chief is a 'black swan' event, analysts warn

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Lawrence H. Summers

Speculation that Larry Summers is the favored candidate to take over Ben Bernanke as Fed chief has resurfaced in recent weeks, prompting a strong backlash from some industry watchers, with one going as far as labeling his potential appointment as a "black swan" event.

"There is a lot to be said that the next Fed chair is going to be picking up a surgery in the middle of surgery, think of it that way—that's very difficult to do," Jack Bouroudjian, CEO of Bull and Bear Partners, told CNBC, referring to the difference between Summers and Bernanke policies.

Summers is seen as a greater hawk between the two, which analysts say could mean the rapid unwinding of the massive U.S. monetary stimulus that has supported the economy.

"That could be the black swan that people aren't expecting," Bouroudjian said.

The choice of the successor to Bernanke, who is expected to step down in January when his term expires, has come down to a two-horse race between Summers, former Treasury Secretary in the Clinton administration, and Fed Vice Chair Janet Yellen, who up until a few weeks ago appeared to be the firm favorite.

(Read more: Wall Street wants Yellen, not Summers as next Fed chief)

But earlier this week, CNBC reported that a source from the Obama administration has said the chance of Summers' appointment was 2 out of 3, reviving the debate once again. Although Summers is broadly considered "brilliant" and capable, he is also known for his volatile and aggressive personality, leading many to doubt he is the right person for the job. Yellen, on the other hand, is considered to be a calmer and more diplomatic contender, and many see her gender working in her favor, considering that Obama has been under pressure to nominate more women.

Analysts say the timing of a transition isn't ideal right now. Global markets have been whiplashed in recent months on the prospect of the Fed paring down its $85 billion a month bond-buying program, with escalating tensions in Syria adding to the volatility this week.

"The problem is the Fed is in a transition phase," said Boris Schlossberg, managing director at BK Asset Management. "[At a time] when you need the strongest amount of leadership, you have none. ... It could create big, big problems for the Obama administration."

"I think that is going to be Obama's worst policy error ever if he appoints Summers right now," he said. "The last thing you need in a turbulent market ... is to put in such a controversial figure on top."

Not everyone was opposed to the idea of Summers as the next Fed chairman, however.

(Read more: Who will lead the Fed? Questions nag at Jackson Hole)

"The fact of the matter is that Larry Summers is probably one of the smartest people ever to embrace Wall Street or economics. He's a brilliant man. ... It's definitely going to be a different Fed if Summers is appointed," said Bill Smith, CEO and president of SAM Advisors.

"Larry Summers the exact 180 [degrees] opposite of Ben Bernanke. He's brash, he's crass, he's aggressive, cantankerous... it's going to be great, there will be a headline for reporters every day," added Smith.

—By CNBC's Katie Holliday: Follow her on Twitter @hollidaykatie