Obama narrows choices for new Fed chairman

President Barack Obama said his nominee for Federal Reserve chairman will be someone who embraces the central bank’s dual mandate to promote price stability and maximum employment, and he has narrowed his choice “to some extraordinarily qualified candidates.”

“I think you can anticipate that over the next several months, an announcement will be made,” Obama said in an interview with the New York Times on July 24, according to a transcript published Sunday on the newspaper’s website. Obama said he has yet to make a final decision and will announce a choice within “several months.”

Obama isn’t expected to nominate a successor to the current chairman, Ben S. Bernanke, until at least September, an administration official said Saturday. He wants a chairman who understands the Fed’s dual mandate to promote maximum employment and price stability, Obama said in the interview at Knox College in Galesburg, Illinois. 

“And when unemployment is still too high, and long-term unemployment is still too high, and there’s still weak demand in a lot of industries, I want a Fed chairman that can step back and look at that objectively and say, ‘Let’s make sure that we’re growing the economy, but let’s also keep an eye on inflation,’” Obama said.

“If the markets start frothing up, let’s make sure we’re not creating new bubbles,’” he said.

Bernanke, whose second four-year term ends on Jan. 31, hasn’t indicated whether he would seek or accept a third term. Last month, Obama said the Fed chairman has stayed in the post “longer than he wanted.”

Obama declined to say who the finalists are, amid speculation that former Treasury Secretary Lawrence Summers and Fed Vice Chairman Janet Yellen are leading candidates.

About a third of the 54-member Senate Democratic caucus sent a letter July 25 encouraging Obama to nominate Yellen.

Obama also discussed the Keystone XL pipeline project, disputing Republican claims it would be a job creator. The project that would connect oil production from Alberta to refineries on the U.S. Gulf Coast would initially create 2,000 jobs during the construction phase that would take a year or two, Obama said.

“And then after that we’re talking about somewhere between 50 and 100 jobs in an economy of 150 million working people,” he said.

The pipeline may benefit the U.S. by integrating energy supplies with Canada, Obama said. He added that he plans to make his decision based on whether the project would significantly contribute to carbon levels in the atmosphere. Canada could be doing more to mitigate carbon release, he said.

Obama in January 2012 denied a permit for Keystone because of concerns about harming the ecologically sensitive Sand Hills region in Nebraska. TransCanada Corp. resubmitted a plan, with a new route from the Canadian border to connect to a pipeline in Steele City, Nebraska.

The State Department has jurisdiction over the fate of the $5.3 billion project that would carry heavy crude called bitumen from Alberta to refineries along the U.S. Gulf Coast because the pipeline crosses the U.S. border with Canada.

The Calgary-based company’s proposal is supported by labor unions and the energy industry and opposed by environmental groups fighting climate change. 

(Bloomberg)