View Full Version : Bernanke 'to replace Greenspan'

24 Oct 05,, 17:43
President Bush is expected to name Ben Bernanke as the new head of the US Federal Reserve, reports suggest.

Current chairman Alan Greenspan's 18-year tenure runs out on 31 January.

Mr Bernanke is currently the government's chief economic advisor after being elected chairman of the Council of Economic Advisers in June.

The former Fed board member and Princeton University economics professor has been widely tipped to take over from Mr Greenspan.

Bernanke has continuity with Greenspan
Alex Beuzelin, analyst with Ruesch International

Mr Bernanke is a leading advocate of "inflation targeting" - an approach widely adopted in Europe. Under the approach central banks set a target for inflation and stick to it.

Reports of the appointment was widely welcomed by financial markets with the Dow Jones index surging 114.6 points to highs of 10,329.8 as rumours of Mr Bernanke's appointment began to circulate.

"He carries a lot of credibility in the marketplace," said Robert Macintosh, chief economist, Eaton Vance Management.

"He's well respected in terms of his knowledge and his experience at the Fed.

"He is seen as a very capable and credible candidate that would prove reassuring in the near term."

But not everyone was pleased.

"He worries me as the next Fed head. He's very tied to what Bush wants too. Having been made the head of the CEA, Bush has gotten to know him, and feels in control," said John Tierney, credit strategist, Deutsche Bank.

During his time at the Fed Mr Greenspan has steadied markets during financial crises, endorsed budget and tax reform, and led the fight against inflation.

Three potential candidates are regularly mentioned for the Fed chairman job: Glenn Hubbard, a past adviser to Bush; Harvard economist Martin Feldstein; and Fed governor-turned White House adviser Ben Bernanke.

Story from BBC NEWS:

26 Oct 05,, 01:20
This has to be the luckiest president in recent times.