President Barack Obama hinted at the retirement of Federal Reserve chairman Ben Bernanke from his position, and indicated that he has no intention of talking him out of stepping down in January after the expiration of his tenure, according to a report from Paul Davidson of USA Today.
During an interview on the Charlie Rose television show, President Obama compared Bernanke with retiring FBI director Robert Mueller who “already stayed in his position a lot longer than he wanted or supposed to.”
Bernanke Did An Outstanding Job: President Obama
President Obama emphasized that Bernanke did an outstanding job in helping the country recover from an economic crisis. According to him, the Federal Reserve chairman “has been an outstanding partner along with the White House, in helping us recover much stronger than, for example, our European partners, from what could have been an economic crisis of epic proportions.”
Bernanke assumed his position as chairman of the Federal Reserve in 2006. He was originally appointed by former President George W. Bush. In his previous statement, he did not show reluctance towards an exit. He said, “I don’t think I am the only person in the world who can manage the exit,” [referring to the bond-buying program]. The Federal Reserve bought more than $2.5 trillion in government bonds since the 2008 financial crisis.
The bond-buying program of the Federal Reserve helped the recovery of the housing market and the stock market despite large spending cuts.
Bernanke Will depart From The Federal Reserve: Survey
Based on a survey conducted by USA Today, two thirds of the economists who responded believe that Bernanke will depart from the Federal Reserve.
Michael Gapen, an economist at Barclays Capital commented, “The workload has been extremely high, and the stress level has been extremely elevated for quite some time.”
Some of the possible candidates to replace Bernanke include Janet Yellen, vice chairman of the Federal Reserve; Donald Kohn, former vice chairman of the agency; Lawrence Summers, former Treasury Secretary under the Clinton administration; and Tim Geithner, President Obama’s former Treasury Secretary.
The Federal Reserve chairman is responsible for supervising the process of the development and implementation of monetary policies. Investors are expected to react strongly to the next person who will be appointed in the position, and are watching to see if he or she will be committed to the existing monetary policies promoted by Bernanke. At present, investors are monitoring the Federal Reserve’s efforts in reducing its $85 billion per month program in purchasing assets.