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Obama to nominate Bernanke for second term as Federal Reserve chairman, administration official says

OAK BLUFFS, Mass. — Federal Reserve Chairman Ben Bernanke, widely credited with taking aggressive action to avert an economic catastrophe after the financial meltdown last fall, will be nominated by President Barack Obama for a second term, an administration official said Monday.

Obama plans to make the announcement today during a break from his vacation on Martha's Vineyard, said the official, who spoke to the Associated Press on the condition of anonymity because the announcement was not yet public.

In remarks prepared for the announcement, Obama praised Bernanke for leading the country through a financial crisis and, with his expertise on the Great Depression, helping to prevent a similar crisis.

In sticking with Bernanke, Obama is looking to reassure the financial sector as well as foreign central banks that his administration has no plans to change course on its largely well-received approach to rescuing the industry from its meltdown or its management of overall monetary policy.

Bernanke has won admiration from Democrats and Republicans on Capitol Hill even as some lawmakers have urged him to retain the Fed's independence and warned him not to become too cozy with the administration. Any move to replace Bernanke could have been perceived as injecting politics into the Fed.

For Obama, there was little political downside in choosing to nominate Bernanke to a second term. The move displays bipartisanship and a steady, unchanging hand on the economic rudder. Bernanke, 55, was appointed Fed chairman by President George W. Bush and sworn in Feb. 1, 2006.

He was a chairman of the President's Council of Economic Advisers and a member of the Board of Governors of the Federal Reserve System during the Bush administration.

His supporters say he has the knowledge and ability to guide a sustainable recovery without igniting inflation, and they argue that without his bold interventions, the global financial crisis could have been much worse.

"He has risen to the occasion admirably after what you might argue was a slow start," Alan Blinder, a Princeton professor and former vice chairman, said recently. "His performance merits reappointment."

Obama to nominate Bernanke for second term as Federal Reserve chairman, administration official says 08/24/09 [Last modified: Monday, August 24, 2009 11:08pm]
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