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Obama renominates Bernanke as Fed chief

(Agencies)
Updated: 2009-08-26 07:30

Bernanke was told in the Oval Office last Wednesday.

Obama is counting on Bernanke to nurse the economy back to health at a time when unemployment, home foreclosures and bank failures are still mounting.

Related readings:  Report: Obama plans to keep Bernanke at Fed  Wall Street jumps on Bernanke remarks  Bernanke: US economy on cusp of recovery  Bernanke warns of long-term unemployment  US regulatory system needs overhaul: Bernanke

The Fed chairman has pushed US interest rates to near zero and flooded financial markets with hundreds of billions of dollars to stem a credit crisis and turn back recession.

Bernanke, appointed by President George W. Bush and widely respected as a top scholar on the Great Depression, now faces the challenge of pulling back the Fed's extraordinary support for the economy without setting back hopes for a recovery.

"Probably the right choice"

Joining Obama in a school hall in the town of Oak Bluffs, Bernanke shook hands with the president before praising his support for a strong and independent Federal Reserve.

"We have been bold or deliberate as circumstances demanded, but our objective remains constant: to restore a more stable economic and financial environment in which opportunity can again flourish, and in which Americans' hard work and creativity can receive their proper rewards," Bernanke said.

After the announcement, Obama headed to a golf course for a second straight day on the links.

Obama's Democrats control the Senate, but Bernanke, a Republican, has faced criticism from lawmakers in both parties who say he has gone too far in extending Fed support that will be difficult to unwind, threatening future inflation.

Senate Banking Committee Chairman Christopher Dodd vowed a "thorough and comprehensive" hearing to consider Bernanke's nomination. But he appeared to endorse a second term for the Fed chairman, saying he was "probably the right choice."

Senate Majority Leader Harry Reid said Bernanke's renomination sent the right signal to financial markets and he expected the Senate to reconfirm him.

Mitch McConnell, the Republican leader in the Senate, said the confirmation hearings would be an opportunity to question Bernanke about the cumulative impact of the administration's trillions of dollars in new spending and borrowing.

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