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Obama Says Bernanke Has Stayed at Fed ‘Longer Than He Wanted’
By bloomberg.com
President Barack Obama said Federal Reserve Chairman Ben S. Bernanke has stayed in his post “longer than he wanted,” one of the clearest signals the central bank chief will leave when his current term expires next year.
“Ben Bernanke’s done an outstanding job,” Obama said in an interview with Charlie Rose that was scheduled to air yesterday, when asked about nominating him for another term subject to Senate approval. “He’s already stayed a lot longer than he wanted or he was supposed to.”
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U.S. Federal Reserve Chairman Ben S. Bernanke listens to a question during a Joint Economic Committee hearing in Washington, D.C. Photographer: Andrew Harrer/Bloomberg
Obama likened Bernanke’s tenure to that of outgoing Federal Bureau of Investigation Director Robert Mueller, who stayed on for two years after his term expired in 2011 and is leaving his post in September. Bernanke’s second four-year stint at the central bank ends Jan. 31.
Bernanke, like Mueller, was initially nominated to the post by former President George W. Bush. Obama asked Bernanke to serve another term as chairman, which he began on Feb. 1, 2010. The 59-year-old former Princeton University professor and Great Depression scholar also served on Bush’s Council of Economic Advisers.
Fed spokeswoman Michelle Smith declined to comment.
Treasuries were little changed after the news, which came on the eve of a two-day meeting of the Fed’s policy-setting Open Market Committee. Yields on benchmark 10-year notes were at 2.18 percent as of 1:21 p.m. in Tokyo. Fed officials in recent months have debated whether to scale back, or taper, their purchases of Treasuries as the U.S. economy extends its recovery.
Communication Challenge
“It’s really hard to believe the next chairman would change the course of monetary policy,” said Roberto Perli, a partner at Cornerstone Macro LP in Washington and a former economist for the Fed’s division of monetary affairs. At the same time, “it doesn’t help make the Fed’s communications easier if Obama is talking about Bernanke in the past tense,” he said.
Using extraordinary powers, Bernanke took the assets of troubled financial firms Bear Stearns Cos. and American International Group Inc. onto the Fed’s balance sheet and rolled out several emergency lending facilities to pump cash into a banking system where confidence had been shattered by the bankruptcy of Lehman Brothers Holdings Inc. in September 2008.
The 18-month recession was the longest and deepest since the Great Depression, and the Standard & Poor’s 500 Index reached a 12-year low in March 2009. Joblessness peaked at a quarter-century high of 10 percent in October 2009. By March 2010, 10.1 percent of all mortgage loans were delinquent, according to data from the Mortgage Bankers Association.
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