He or she will also need to contend with the disappointing economic recovery and stubbornly high jobless rate four-and-a-half years after the recession ended. Of course, by standing pat this week, Bernanke has likely also given the new chairman more leeway in charting a course for a group of Fed policymakers that could include several new members.
Fed Governor Sarah Raskin has been nominated for a top U. Treasury job and Elizabeth Duke stepped down last month. Among the decisions ahead: when to start reducing asset purchases, how quickly to wind them down, and whether to trim purchases of Treasuries or mortgage-backed securities first.
In addition, the new chair importantly will need to assure markets that cutting bond purchases does not mean the Fed is close to raising interest rates. She also would be taking the helm of the Fed when policies that were pursued by Bernanke are put to the test, as the massive amounts of Fed liquidity are unwound and interest rates rise.
I think this could be one of the events where we think it's discounted but it's not. This is a major deal, handing over the reins. It's only happened twice in the last 30 years," Rupkey said. She's doing a lot more papers. But I'm not sure she's on the radar for investors at large. I think nobody is really focusing on this right now. But to the chairman's credit, he has kind of set up with Vice Chair Yellen as head of the communications subcommittee, they've set up something where policy really is on autopilot.
Bernanke also has his critics, but many believe his strong background on the Great Depression made him especially well-suited to serve as Fed chairman during the financial crisis. Bernanke has overseen an increased openness in communications from the Fed, and the markets are now watching for the Fed's targeted inflation rate of 2 percent and unemployment at 6.
He's been a source of stability and confidence to the extent the markets have built up confidence and are more stable because of his decisiveness and creative actions," said Crescenzi. He previously was a Fed governor, and the chair of the Princeton economics department prior to that. The market's confident that the bench is deep and what Bernanke's done has been institutionalized. The rules-based approach is institutionalized," Crescenzi said.
Rupkey said Yellen helped push through the balancing of the Fed's two mandates and the communication of them. There will be a clear tip to the market that they're on top of this, and they're going to make the six months' transition smooth," he said. These data suggest that the wealthy were more aware and more appreciative of Bernanke's performance.
Bernanke's consequential legacy may take decades to fully assess, but he has already won many plaudits from an array of economists, policymakers, and financial analysts.
Bloomberg Businessweek said of Bernanke's tenure that "the U. News and World Report wrote, "the Fed chairman literally saved the country from another Great Depression. The American public is divided on Bernanke's job performance. Many of the commentaries applauding Bernanke's actions focus on what might have happened had the Fed chairman not intervened, but most Americans are more likely to judge Bernanke, like other public officials, on the results of his policy decisions, rather than what might have been.
While even a man as powerful as Bernanke cannot control all of the interrelated forces that drive the economy, Americans' views on his job as top central banker have been shaped by the speed and breadth of the recovery. And for many, the economic recovery remains underwhelming. Results for this Gallup poll are based on telephone interviews conducted Jan. Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking.
Landline and cellular telephone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday. Samples are weighted to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. Demographic weighting targets are based on the most recent Current Population Survey figures for the aged 18 and older U.
Phone status targets are based on the most recent National Health Interview Survey.
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