US Federal Reserve Chairman Ben Bernanke will most likely step down from his position in January 2014, even if President Barack Obama stays for a second term, according to friends of the chairman.
Bernake’s future uncertainty has caused the president to start thinking of replacements, should he be reelected, the New York Times reported. At the top of Obama’s list is Lawrence Summers, who served as Treasury Secretary from 1999 to 2001. Under Obama, Summers was the Director of the White House United States National Economic Council until November 2010.
Bernanke has declined to comment publicly about whether or not he would accept a third term. The Federal Reserve chairman has served under President George W. Bush and was granted a second term by the Obama administration.
“I am very focused on my work, I don’t have any decision or any information to give you on my personal plans,” he said at a news conference in September.
If he chooses to step down, he would leave open a second position considered among the most powerful in the nation: Treasury Secretary Timothy Geithner already announced that he would resign in 2014.
“That would be a one-two punch, with two of the most important jobs in the nation up for grabs,” wrote New York Times columnist Andrew Sorkin.
Even if Republican presidential nominee Mitt Romney wins the presidency, Bernanke would not have the chance to remain in office. Romney has already announced that he would not re-nominate the current Federal Reserve chairman. Opponents of the Obama administration, including Republicans and some economists, have repeatedly criticized the Federal Reserve’s efforts to stimulate growth, claiming the department has made decisions that will increase inflation and debt.
The Federal Reserve in September announced that the central bank would purchase mortgage securities at a rate of $40 billion each month, until the labor market outlook has improved “substantially.”
Critics have warned that purchasing more bonds raises the risk of higher inflation at a later date.
If Romney wins the election, he said he would like nominate Glenn Hubbard, former head of the Council of Eocnomic Advisers under former President George W. Bush, for the Federal Reserve chairmanship.
If the incumbent president is reelected, he would probably consider replacing Bernanke with Janet Yellen, the current vice chairwoman, and economist Alan Krueger. Geither may also be on the president’s list, Sorkin wrote in the column.