Obama Says He’s Mulling ‘Range’ of Candidates for Fed Chief
Choosing a replacement for Fed Chairman Ben S. Bernanke, whose term expires on Jan. 31, is “definitely one of the most important economic decisions that I’ll make in the remainder of my presidency,” Obama said at a White House news conference.
Obama told House lawmakers last week that he’s considering Summers, his former top economic adviser, Yellen, the Fed’s current vice chairman and former Fed Vice Chairman Donald Kohn for the job. Obama today mentioned Summers and Yellen, saying they were among several candidates he’s considering who would understand the Fed’s dual mandate to target price stability and full employment.
“A critical part of the job is making sure that we keep inflation in check, that our monetary policy is sound, that the dollar is sound,” Obama said. At the same time, “the challenge is we’ve still got too many people out of work, too many long-term unemployed, too much slack in the economy, and we’re not growing as fast as we should.”
The U.S. economy grew at a 1.7 percent annualized rate in the second quarter after a 1.1 percent gain the prior three months, Commerce Department figures show. The economy has grown at an average 2.2 percent quarterly pace since the recession ended June 2009.
Employers added 162,000 workers in July, the least in four months and following a revised 188,000 rise in June that was less than initially estimated. While the unemployment rate declined to 7.4 percent from 7.6 percent, policy makers have expressed concern about discouraged workers dropping out of the labor force and others who have been unable to find work for an extended period.
The labor market is “far from satisfactory, as the unemployment rate remains well above its longer-run normal level, and rates of underemployment and long- term unemployment are still much too high,” Bernanke told lawmakers July 17.
While Bernanke hasn’t said whether he’d consider staying for a third term, Obama indicated in a June interview with Charlie Rose that the Fed chief had stayed in the post “longer than he wanted.”
When he met with members of Congress, Obama defended Summers, who has been criticized by members of the president’s own Democratic Party. He said that didn’t indicate Summers had an inside track.
“I tend to defend folks who I think have done a good jobs” and don’t deserve attacks, Obama said.
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