3REPORT - Bernanke to be reappointed as Fed chief

Bernanke to be reappointed as Fed chief

August 24, 2009

Ben Bernanke is to be reappointed for a second four-year term as chairman of the Federal Reserve, according to a White House official.

Editors Comment: Wtf man. Wtf.

By Krishna Guha in Washington

President Barack Obama will make the announcement on Tuesday in Martha’s Vineyard, where he is on holiday with his family. The decision is the ultimate seal of approval for the Fed chairman, who was originally appointed by George W Bush, the Republican former president, and whose reappointment was seen as far from guaranteed.

It follows Mr Bernanke’s extraordinarily aggressive efforts to fight the economic crisis, including radical interest rate cuts, loans to non-bank financial institutions, Fed-led bailouts of Bear Stearns and AIG and gigantic asset purchases – exploiting the Fed’s powers to their legal limits in a bid to prevent a second Great Depression.

Economists, investors and fellow central bankers overwhelmingly favoured Mr Bernanke’s reappointment. However, disquiet in Congress over the exercise of extraordinary Fed powers raised a cloud over his future.

The Fed chairman’s reappointment still has to be approved by the Senate, but his prospects look good. Chris Dodd, chairman of the Senate banking committee, said “reappointing Chairman Bernanke is probably the right choice”, though he promised a “thorough and comprehensive confirmation hearing.”

Mr Obama is said to credit Mr Bernanke with a leading role in helping to avert economic catastrophe. By reappointing Mr Bernanke — who worked in the Bush White House — Mr Obama can also emphasise his bipartisan credentials at a time when he is embroiled in a fiercely partisan battle over healthcare reform.

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