LONDON — President Barack Obama has suggested he will allow US Federal Reserve chairman Ben Bernanke to retire despite the US central bank facing a crucial period as it decides when to scale back its $85bn a month of asset purchases.
The Fed started a two-day meeting yesterday where the timing of the withdrawal from its latest bond-buying programme is expected to be discussed. Markets have been volatile in recent weeks as investor concerns surrounding the reduction of the bond purchases mount.
In an interview on the Charlie Rose television show on Monday night, Mr Obama compared Mr Bernanke to Robert Mueller, the Federal Bureau of Investigation (FBI) director, who is due to retire in the coming months after staying on for two years longer than he intended. "Well, I think Ben Bernanke’s done an outstanding job. He is a little bit like Bob Mueller, the head of the FBI — where he’s already stayed a lot longer than he wanted or he was supposed to."
Mr Bernanke has been Fed chairman since 2006 and is expected to step down when his term ends next January. He has indicated that he is not averse to leaving, saying at his last press conference: "I don’t think I’m the only person in the world who can manage the exit (from the bond-buying programme)."
But he has not publicly stated his preference for any departure.
In the interview, Mr Obama heaped praise on the Fed chairman for his handling of the economy during the financial crisis. "He 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."
The favourite to succeed Mr Bernanke is his deputy, Janet Yellen, who was one of the architects of the Fed’s strategy to purchase assets. Other possible candidates include Tim Geithner, Mr Obama’s former Treasury secretary, and former Fed vice-chairmen Roger Ferguson and Donald Kohn.
But for now investors will be looking to the end of the latest meeting for signs from Mr Bernanke on how close the Fed is to tapering down its $85bn a month in asset purchases. He is expected to balance any tapering signs by saying subsequent moves depend on what happens to the economy.