Larry Summers may be a creature of Wall Street, but Wall Street didn’t want him.

News of Summers’ withdrawal from the race to be the next Federal Reserve Chairman sent stocks and bonds jumping around the world Sunday afternoon and Monday morning. U.S. stock futures rallied more than 1 percent, equity markets in Asia and Europe cheered, and rising bond prices pushed interest rates to their lowest levels in a month (bond prices and interest rates move in opposite directions).

“I think this is overall good for the markets,” Peter Tchir, founder of research and trading firm TF Market Advisors, wrote in an email.

“Bullish methinks!” wrote David Ader, chief bond strategist for CRT Capital in Stamford Connecticut.

If you’ve read any of the press about Summers over the past few months, this reaction might surprise you. Summers is generally considered to be in the pocket of Wall Street. He actually gets paid by Citigroup and other banks for his bloviations. He is infamous for his push in the 1990s to deregulate banks and derivatives. That helped the banks make kazillions of dollars.

But Wall Street made it clear early and often that it never wanted Summers to be the Fed Chairman, for more than one reason.

For one thing, traders feared Summers would tighten monetary policy more quickly than his rival for the Fed job, Vice Chair Janet Yellen. He grumbled publicly about the Fed’s extraordinary stimulus program known as “quantitative easing.”

Otherwise, Summers revealed little about his approach to monetary policy — the term for the Fed pumping money into the economy to make it run. That made him a huge unknown quantity, about to take over the most important monetary-policy job in the world. Markets don’t like uncertainty.

On top of the uncertainty about what Summers would do as Fed chair, there was the uncertainty about whether he would even get the job. Wall Street would have gnawed its fingernails over a knock-down, drag-out fight over the Fed chairmanship. It would be like the final season of Breaking Bad, only less entertaining and with real money at stake.

And don’t ignore the problem of Summers’ reputation as a miserable jackass who is often wrong but never in doubt. That is a recipe for sure failure on the Federal Reserve. Yellen, in contrast, is seen as scholarly, collegial, prescient — a smarter, female Ben Bernanke. As much as markets don’t like uncertainty, they love consistency.

Summers might not have hurt the economy as Fed Chairman. Fortunately, we’ll never know. But the mere threat of his becoming Fed Chairman was hurting the economy lately, by hurting stocks and bonds. His withdrawal from the race is a boon. As American University economist Daniel Lin hilariously tweeted on Sunday:

“Upon hearing that stocks futures are rising, Summers promises to keep withdrawing from Fed chair consideration until economy recovers.”

Also on HuffPost:

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  • Myth: The Fed actually prints money.

    <a href=”http://www.foxbusiness.com/industries/2012/08/17/chance-fed-printing-more-money-jumps-to-60/”>People commonly say</a> that the Fed itself prints money. It’s true that the Fed is in charge of the money supply. But technically, <a href=”http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html”>the Treasury Department prints money on the Fed’s behalf</a>. Asking the Treasury Department to print cash isn’t even necessary for the Fed <a href=”http://www.huffingtonpost.com/2012/03/21/federal-reserve-profit-2011_n_1369354.html”>to buy securities</a>.

  • Myth: The Federal Reserve is spending money wastefully.

    Both CNN anchor <a href=”http://www.huffingtonpost.com/2012/08/31/cnn-erin-burnett-federal-reserve-stimulus_n_1848210.html” target=”_hplink”>Erin Burnett</a> and Republican vice presidential nominee <a href=”http://thinkprogress.org/economy/2012/09/07/813011/paul-ryan-jobs-qe/” target=”_hplink”>Paul Ryan</a> have compared the Federal Reserve’s quantitative easing to government spending. But <a href=”http://www.huffingtonpost.com/2012/03/21/federal-reserve-profit-2011_n_1369354.html”>the Federal Reserve actually has created new money</a> by expanding its balance sheet. <a href=”http://www.huffingtonpost.com/2012/03/21/federal-reserve-profit-2011_n_1369354.html”>The Fed earned a $77.4 billion profit</a> last year, most of which it gave to the U.S. government.

  • Myth: The Fed is causing hyperinflation.

    <a href=”http://krugman.blogs.nytimes.com/2011/12/15/inflation-predictions/” target=”_hplink”>Some</a> <a href=”http://www.businessinsider.com/niall-ferguson-has-been-wrong-on-economics-2012-8″ target=”_hplink”>conservatives</a> <a href=”http://www.businessinsider.com/ron-paul-is-putting-on-a-great-show-right-now-in-front-of-bernanke-2012-2″>have claimed</a> that the Federal Reserve is causing hyperinflation. But inflation is actually at <a href=”http://www.nytimes.com/2011/09/18/sunday-review/the-facts-on-the-fed.html” target=”_hplink”>historically low levels</a>, and there is no sign that is going to change. <a href=”http://www.bls.gov/news.release/cpi.nr0.htm” target=”_hplink”>Core prices have risen</a> just 1.4 percent over the past year, according to the Labor Department — below the Federal Reserve’s <a href=”http://www.federalreserve.gov/newsevents/speech/bernanke20120831a.htm” target=”_hplink”>target of 2 percent</a>.

  • Myth: The amount of cash available has grown tremendously.

    <a href=”http://www.nytimes.com/2011/02/10/business/economy/10fed.html?_r=1″>Some Federal Reserve critics claim</a> that the Fed has devalued the U.S. dollar through a massive expansion of the amount of currency in circulation. But not only is inflation low; <a href=”http://www.businessinsider.com/the-animated-gif-of-boy-throwing-money-out-of-the-window-is-not-a-metaphor-for-qe-2012-9″>currency growth also has not really changed</a> since the Fed started its stimulus measures, as noted by Business Insider’s Joe Weisenthal.

  • Myth: The gold standard would make prices more stable.

    <a href=”http://www.businessinsider.com/ron-paul-is-putting-on-a-great-show-right-now-in-front-of-bernanke-2012-2″>Rep. Ron Paul (R-Tex.) has claimed</a> that bringing back the gold standard would make prices more stable. But prices actually were much less stable under the gold standard than they are today, as <a href=”http://www.theatlantic.com/business/archive/2012/08/why-the-gold-standard-is-the-worlds-worst-economic-idea-in-2-charts/261552/”><em>The Atlantic’s</em> Matthew O’Brien</a> and <a href=”http://www.businessinsider.com/why-conservatives-like-the-gold-standard-2012-8″>Business Insider’s Joe Weisenthal</a> have noted.

  • Myth: The Fed is causing food and gas prices to rise.

    <a href=”http://www.huffingtonpost.com/2012/09/08/erin-burnett-federal-reserve_n_1866971.html”>CNN anchor Erin Burnett claimed in September</a> that the Federal Reserve’s stimulus measures have caused food and gas prices to rise. But many economists believe global supply and demand issues are influencing these prices, not Fed policy. And <a href=”http://www.huffingtonpost.com/2012/09/08/erin-burnett-federal-reserve_n_1866971.html”>there actually is no correlation between the Fed’s stimulus measures and commodity prices</a>, according to some economists Paul Krugman and Dean Baker.

  • Myth: Quantitative easing has not helped job growth.

    <a href=”http://www.forbes.com/sites/michaelpento/2012/05/01/why-higher-inflation-destroys-jobs/”>Some Federal Reserve critics</a> claim that the Fed’s stimulus measures have destroyed jobs. But <a href=”http://www.federalreserve.gov/newsevents/speech/bernanke20120831a.htm”>the Fed’s quantitative easing measures actually have saved or created more than 2 million jobs</a>, according to the Fed’s economists. In addition, JPMorgan Chase chief economist Michael Feroli told Bloomberg last month that <a href=”http://www.bloomberg.com/news/2012-09-10/bernanke-proves-like-no-other-fed-chairman-on-joblessness.html” target=”_hplink”>QE3 will provide at least a small benefit</a> to the economy.

  • Myth: Tying the U.S. dollar to commodities would solve everything.

    <a href=”http://articles.nydailynews.com/2012-08-16/news/33236684_1_monetary-policy-inflation-currency-debasement”>Rep. Paul Ryan (R-Wis.) has proposed</a> tying the value of the U.S. dollar to a basket of commodities, in an aim to promote price stability. But <a href=”http://www.theatlantic.com/business/archive/2012/08/forget-paul-ryans-budget-his-scariest-idea-is-about-the-federal-reserve/261066/”>this actually would cause prices to be much less stable</a> and hurt the U.S. economy overall, as <em>The Atlantic’s</em> Matthew O’Brien has noted.

  • Myth: Ending the Fed would make the financial system more stable.

    <a href=”http://www.amazon.com/End-Fed-Ron-Paul/dp/B004IEA4DM”>Rep. Ron Paul (R-Tex.) claims</a> that ending the Federal Reserve and returning to the gold standard would make the U.S. financial system more stable. But <a href=”http://www.bloomberg.com/video/should-the-u-s-return-to-the-gold-standard-wsDVrOKATTqyTaG5yBY1kQ.html”>the U.S. economy actually experienced longer and more frequent financial crises and recessions</a> during the 19th century, when the U.S. was using the gold standard and did not have the Fed.

  • Myth: The Fed can’t do anything else to help job growth.

    <a href=”http://www.nytimes.com/2011/07/31/business/economy/whats-with-all-the-bernanke-bashing.html”>Many</a> <a href=”http://www.guardian.co.uk/business/economics-blog/2012/jun/27/federal-reserve-runs-out-of-options”>commentators</a> have claimed that there simply aren’t any tools left in the Fed’s toolkit to be able to help job growth. But <a href=”http://www.bloomberg.com/news/2012-07-09/fed-harms-itself-by-missing-goals-stevenson-and-wolfers.html”>some economists</a> <a href=”http://www.boston.com/bostonglobe/ideas/articles/2011/08/28/the_i_word/”>have noted</a> that the Fed could target a higher inflation rate to stimulate job growth. <a href=”http://economix.blogs.nytimes.com/2012/04/25/bernanke-on-what-the-fed-can-do/”>The Fed, however, has ruled this option out</a> — for now.

  • Myth: The Fed can’t easily unwind all of this stimulus.

    <a href=”http://www.salon.com/2012/09/01/ben_bernanke_speaks//”>Some commentators</a> <a href=”http://seekingalpha.com/article/161203-fed-unwinding-won-t-be-easy”>have claimed</a> that the Fed can’t safely unwind its quantitative easing measures. But the Fed’s program involves buying some of the most heavily traded and owned securities in the world, Treasury and government-backed mortgage bonds. The Fed will likely have little problem finding buyers for these securities, all of which will eventually expire even if the Fed does nothing. But <a href=”http://economistsview.typepad.com/timduy/2012/09/plosser-opposes-the-1933-37-expansion.html”>economists have noted</a> that once the Fed decides it’s time to unwind the stimulus, the economy will have improved to such an extent that this won’t be an issue.