President Obama Renominates Bernanke As Fed Chief

08.25.09 | FL News Team

(Oak Bluffs, MA) -- Briefly interrupting his Martha's Vineyard vacation, President Obama has renominated Ben Bernanke to a second term as chairman of the Federal Reserve.  The president cited the Fed chairman's "bold action and outside-the-box thinking in helping put the brakes on our economic freefall."

Obama praised Bernanke for his calm and wise approach to what the president called a "financial system on the verge of collapse."  During Bernanke's tenure, he has pushed interest rates in the U.S. to near zero and flooded financial markets with hundreds of billions of dollars in an effort to ward off a credit crisis and turn back recession.

Meanwhile, Senator Chuck Grassley (R-Iowa) is warning that the economy could see hyperinflation not seen since the early 1980s if the Federal Reserve does not tighten its monetary policy. Grassley says Bernanke's ability to reign in inflation would be the measure of the success of the Reserve.

Speaking about how Bernanke has done so far, Grassley says, "We won't know for a year if he's done a good job so far, because he shoveled money out of an airplane to save banks and the financial system. But shoveling money out of an airplane to solve problems can be inflationary — in this case, hyperinflationary — if he doesn't stop mopping up some of the money that's out there."

Bernanke's appointment to a new four-year term must still be confirmed by the Senate.