No talks on new term for Bernanke

Federal Reserve chairman Ben Bernanke said he had not discussed with US President Barack Obama the possibility of serving a third term at the helm of the US central bank, leaving his future up in the air.

It came as the Fed took the unprecedented step of saying it would keep interest rates near zero until the jobless rate falls to 6.5%, well below its current level, and it promised to pump more money into the economy.

It said its commitment to hold rates steady until its unemployment threshold was reached would hold as long as inflation was projected to be no more than 2.5% one or two years ahead and inflation expectations were contained.

The decision, accompanied by an announcement to replace a more-modest and expiring stimulus program with a fresh round of Treasury debt purchases, came as a surprise.

Meanwhile, Bernanke, whose term ends in Jan 2014, said there had been no conversations about continuing. He was speaking at the announcement of the bond buying plan.

“I think the president has got quite a few issues he needs to be thinking about, from the fiscal cliff to many other appointments and so on,” he said.

Bernanke was first appointed to head the central bank by George W Bush, a Republican, and took the helm in 2006. He was reappointed by Obama in Feb 2010. Few outsiders expect Bernanke to seek a third term, given how tumultuous the last few years have been steering the United States through the financial crisis and Great Recession.

Bernanke himself has not spoken publicly about it, and some wonder whether he will want to see the Fed’s unprecedented steps through to their end when policies will need tightening and trillions of dollars worth of purchased bonds will need to be sold off.

— Reuters