President George W. Bush nominated Alan
Greenspan to a fifth term as chairman of the Federal Reserve,
saying the central banker has done a “superb job” in guiding the
U.S. economy to the fastest growth in two decades.
“I have great continuing confidence in his economic
stewardship,” Bush said in a written statement that White House
press secretary Scott McClellan read to reporters. Greenspan, in a
separate statement, said he was “honored” by the nomination and
would serve if confirmed again by the U.S. Senate.
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The Fed chairman presides over U.S. monetary policy, guiding
the central bank’s decisions on interest rates and advising
Congress and the president on economic issues. Through his actions
and longevity, Greenspan has also gained great influence over Wall
Street.
While he’s been nominated to a four-year term as chairman,
former colleagues expect the 78-year-old Greenspan to step down in
February 2006 when his separate, non-renewable term as a Fed
governor expires. That gives the economist about a year and a half
to bolster his legacy and ensure the expansion is on solid footing
before leaving.
After joining the Fed in August 1987, Greenspan steered the
economy through the stock market crash of October 1987, helped
drive inflation down to levels not seen since the Kennedy
administration, and presided over the longest post-World War II
economic expansion, from March 1991 to March 2001.
Greenspan pushed a strategy of preempting inflation by moving
quickly to raise interest rates when prices began rising. The
consumer price index excluding food and energy was rising at a 4
percent annual rate the year before he took office; it rose at a
1.8 percent annual rate over the past 12 months.
Bloomberg News
