Summers (pictured), the favourite to replace Bernanke, exited the race last night after both economists and US senators said they would oppose his selection.
With investors having anticipated a faster withdrawal of monetary stimulus under Summers’ tenure, markets rallied in the hope of a slower withdrawal of QE next year.
In June, Bernanke’s announcement the central bank could scale back its programme of quantitative easing sent ripples through the money markets and triggered speculation that interest rates in the UK could rise.
Janet Yellen, vice chair of the Fed board of governors, is now the frontrunner in the race to replace Bernanke on 31 January next year.