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Hagel has had a more hands-on approach than Panetta and had wanted Carter's role more strictly defined with a primary focus on the defense budget instead of broader policy issues, according to some former officials and a recent report in Foreign Policy.
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Second, the Fed must give the impression that it will respond appropriately in either direction as events unfold. Not that they, Larry Summers-style, have brilliantly deduced the answer and will beat the rest of us to the spot. Rather, that they will move slowly and prudently. Yellen seems as well equipped as anyone to play that role.