Bernanke’s done, Obama kinda sorta says

June 18, 2013

The countdown may have officially begun for Federal Reserve Chairman Ben S. Bernanke.

After seven tumultuous years, his term as head of the nation’s central bank ends Jan. 31. He is widely expected not to stay on, though he has been mum on his official plans.

This time next year, it may just be "Dr. Bernanke" to you.(Photo by Andrew Harrer/Bloomberg)
This time next year, it may just be "Dr. Bernanke" to you. (Photo by Andrew Harrer/Bloomberg)

But President Obama seemed to suggest that conventional wisdom is correct during an interview Monday night with talk-show host Charlie Rose. The hint came in the last question of the 50-minute conversation:

Charlie Rose: Some people would like to see you announce that you are reappointing Ben Bernanke as chairman of the Fed.

 

President Obama: Well, I think Ben Bernanke's done an outstanding job. Ben Bernanke’s 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. But I think he’s . . .

 

Rose: But if he wanted to be reappointed you would reappoint him?

 

Obama: 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.

This is not the first clue that Bernanke may be ready to step down. He is skipping the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyo., in August, the first time a sitting chairman has not attended the gathering of economic bigwigs in 25 years. In a news conference with reporters in March, he said he had talked to the president “a bit” about his future but emphasized that he is “not the only one” who could manage the eventual wind-down of the Fed’s unprecedented steps to save the economy. And many of those close to him have long assumed Bernanke's second four-year term would be his last.

Another news conference is scheduled for Wednesday, to coincide with the end of the Fed’s regular policy-setting meeting. Bernanke will almost certainly be asked (perhaps even by this reporter!) about his reaction to Obama’s statements and his own path forward. But after seven years of nearly nonstop crisis, the chairman has developed a pretty good poker face. We don’t expect him to reveal any more than he intends to.

Isaac Boltansky, a policy analyst at Compass Point Research & Trading, said Bernanke will keep his cards close until after his biannual testimony before the Senate next month. For Bernanke’s first appointment as chairman, Boltansky counted 99 days between the official announcement in October and his Senate confirmation vote. The second time around took 156 days, with formal word in August and confirmation just days before the next term began.

That timeline suggests the White House should announce its pick to replace Bernanke by September, Boltansky said. Which means it needs to start testing the waters now – and that seems to be just what the president was trying to do.

Ylan Q. Mui is a financial reporter at The Washington Post covering the Federal Reserve and the economy.
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Dylan Matthews · June 18, 2013