Monday, October 24, 2005

The New Fed Chairman is ... UPDATED

the CW has that it will be former Fed governor and current Chairman of the President Council of Economic Advisers Ben Bernanke, one of the frontrunners who CNBC has tapped will be the pick. The announcement is due at 1pm today.

The former chief US economist at my bank here likes Bernanke and thinks he'll be an effective chair.

Other frontrunners are Martin Feldstein, Glenn Hubbard and Lawrence Lindsey.

I had Feldstein at Harvard for American Economic Policy and he would be my preferred pick. Feldstein argues strongly and effectively on national savings and has always been an outspoken proponent of incentiving saving rather than consumption. I don't know that much about Bernanke who advocates a more explicit inflation target with which I don't agree. Explicit targets limit flexibility and distort the decision-making process.

John Tamny at National Review does not like Bernanke, calling him "Keynesian".

It's unlikely that the Bush Administration will 'Harriet Miers' this pick even though Bush's track record on finance related appointments has left something to be desired. Any of the favorites above would be market friendly. Both the Dow and S&P are up about a percent which indicates support for a Bernanke pick.


Bernanke is the pick.

No comments: