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WORLD> America
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Obama renominates Bernanke as Fed chief
(Agencies)
Updated: 2009-08-26 07:30 OAK BLUFFS, Mass.: US President Barack Obama nominated Ben Bernanke to a second term as Federal Reserve chairman on Tuesday, aiming for continuity at a time when the US economy is breaking free from a deep recession. The decision, while widely expected, was welcomed by financial markets and policy makers around the globe. Economists said it removed uncertainty at a delicate juncture in the economy's recovery.
Obama interrupted his vacation on the Massachusetts island of Martha's Vineyard to make the brief announcement with Bernanke, 55, at his side. "Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall," Obama said. Bernanke's four-year term expires in January and the president had not been expected to make an announcement until later this year. Critics said the announcement had been timed to deflect attention from less market-friendly news on the government's budget deficit, but an Obama aide denied this. "There has been a considerable amount of speculation in the marketplace, both in the market and among observers of the Fed, and going into the fall the president wanted to end that speculation," Austan Goolsbee, a member of the White House Council of Economic Advisers, told Reuters Television. The White House raised its 10-year cumulative budget deficit projection by $2 trillion on Tuesday to approximately $9 trillion. That would push the national debt up from more than $11 trillion now to more than $20 trillion in 2019. With polls showing Americans deeply worried about the deficit, the new data will make it more difficult for Obama to push through his ambitious economic and healthcare overhaul.
Obama made decision last month Before the president began a week-long vacation on Sunday, Obama administration officials repeatedly stressed that he would not be making news. Analysts said the timing of the announcement was shrewd. "We entered the financial crisis two years ago with an untested Fed chairman. Bernanke has been through the crucible since then," said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey. "Moving into the clean-up phase with another new and untested chairman would have just compounded the uncertainty in the outlook." With growing signs the US economy is slowly recovering, thanks in large part to Bernanke's efforts, the Fed chairman should have little difficulty winning confirmation from the Senate again. Obama decided to nominate Bernanke a month ago, after consulting Treasury Secretary Timothy Geithner and White House chief of staff Rahm Emanuel, an administration official said. Lawrence Summers, Obama's top White House economic adviser and a former US Treasury secretary who had been mentioned as a possible candidate for the top job at the Fed, also recommended Bernanke's nomination, the official said. |
