* Bernanke wins high marks from financial markets
* Must be confirmed by U.S. Senate
* Renomination expected but early move should ease fears
* Obama to praise Bernanke for courage and creativity
(Adds quotes, details)
By Ross Colvin and Patricia Zengerle
OAK BLUFFS, Mass., Aug 24 U.S. President Barack
Obama will nominate Ben Bernanke to a second term as chairman
of the Federal Reserve on Tuesday as the economy shows signs of
recovery, a senior administration official said on Monday.
Bernanke, whose appointment as head of the U.S. central
bank must be confirmed by the Senate, has led the Fed and the
U.S. economy through its most tumultuous period since the Great
Depression of the 1930s. Obama's Democrats control the Senate.
Investors have given Bernanke high marks on the job and had
widely expected him to be kept on by Obama, although the
announcement was not expected until later this year.
Analysts said the early move by Obama -- before Bernanke's
four-year term ended on Jan. 31, 2010 -- would be welcomed by
financial markets and would halt any lingering worries about
who might lead the Fed as the economy bounces back.
"I think it's very smart. It will be encouraging for the
market," said Jim Awad, managing director at Zephyr Management
in New York. "He's viewed very positively -- he saved us from
depression and the economy is recovering."
Bernanke, 55, was appointed by Obama's Republican
predecessor President George W. Bush to succeed Alan Greenspan
and is a widely respected monetary scholar who has long called
for a more open central bank. [ID:nN24174889]
Critics say Bernanke was part of a Fed that failed to spot
a ballooning housing bubble and stood idly by as risky lending
proliferated, leading to the credit crisis.
In remarks prepared for delivery at an event in Martha's
Vineyard, Massachusetts, where Obama is on vacation, the
president will also say the U.S. auto industry is "showing
signs of life" and the U.S. credit and housing markets have
been "saved from collapse," the official said.
"The man next to me, Ben Bernanke, has led the Fed through
one of the worst financial crises that this nation and this
world have ever faced," Obama will say in a statement to the
media at 9 a.m. EDT/1300 GMT.
Obama will say Bernanke had dealt with the financial crisis
with "bold action and outside-the-box thinking that has helped
put the brakes on our economic freefall."
"Our auto industry is showing signs of life. Business
investment is showing signs of stabilizing. Our housing market
and credit markets have been saved from collapse," Obama will
Bernanke has mapped out his exit strategy to pull the
economy back from exceptionally low interest rates and
extricate the Fed from a flood of loans to financial markets
without sparking unwanted inflation.
"As an expert on the causes of the Great Depression, I'm
sure Ben never imagined that he would be part of a team
responsible for preventing another," Obama will say.
"But because of his background, his temperament, his
courage, and his creativity, that's exactly what he has helped
to achieve. And that is why I am reappointing him to another
term as Chairman of the Federal Reserve."
(Additional reporting by Megan Davies in New York and Anthony
Boadle in Washington; Editing by John O'Callaghan and David