* Source says Treasury Secretary Lew leading search
* Bernanke silent; Yellen seen as likely replacement
* Transition could come at delicate juncture for Fed policy
By Steve Holland
WASHINGTON, June 27 The White House has
assembled a short list of candidates to succeed Federal Reserve
Chairman Ben Bernanke, a source familiar with the process said
on Thursday, and U.S. Treasury Secretary Jack Lew is running the
Bernanke is expected to leave when his second term as head
of the central bank ends on Jan. 31, after an eventful eight
years in helping the U.S. economy recover from the worst
recession since the Great Depression.
President Barack Obama hinted in a television interview this
month that Bernanke would step down, comparing him to longtime
FBI Director Robert Mueller, who agreed to stay two years longer
in the job than he had planned, and is now to leave.
Lew has assembled a short list with help from several senior
White House officials, the source said, speaking on the
condition of anonymity.
There was no information on who is on the list, although Fed
Vice Chair Janet Yellen, former Obama adviser Lawrence Summers
and former Treasury Secretary Timothy Geithner are considered to
be likely leading choices.
"We decline to comment on speculation on any personnel
matters until the president has made his decisions and is ready
to announce them," said Amy Brundage, a White House spokeswoman.
"The president believes that Chairman Bernanke is a vital
and excellent partner in promoting our economic recovery and he
continues to serve admirably and with distinction during this
important time for our country," she said.
BERNANKE SILENT; YELLEN SEEN IN THE LEAD
Bernanke has yet to say whether he would like to serve
another four years at the helm of the central bank, but has done
little to dampen speculation he is ready to leave.
The likely succession could come at a delicate juncture for
U.S. monetary policy.
Bernanke said last week that the central bank expected to
lighten up later this year on the amount of money it is pumping
into the economy each month through a bond-buying program.
He said the Fed would likely draw that program to a full
close around the middle of next year, when policymakers at the
central bank expect the jobless rate will have fallen to around
7 percent from its current 7.6 percent.
Those comments spurred a big selloff in stock markets around
the globe and sent the yield on the benchmark 10-year U.S.
Treasury note soaring. It reached a 22-month high of 2.67
percent on Monday.
Fed officials have mounted a concerted effort to convince
markets they overreacted to the chairman's remarks, and they
have underscored the central bank's commitment to keep overnight
interest rate near zero until unemployment drops to at least 6.5
percent. Stock markets have since stabilized and bond yields
have fallen back.
The market volatility, however, underscored the tricky task
the Fed faces in stepping away from the controversial and
unprecedented easing of monetary policy Bernanke led.
To combat the deep recession and heal the scars from the
financial crisis that followed the bursting of the U.S. housing
bubble, the Fed pressed overnight rates to near zero, where they
have been since December 2008. It also more than tripled its
balance sheet to $3.4 trillion through a series of bond
The next chairman of the central bank will likely face the
task of unwinding that monetary largesse.
In a Reuters poll of economists earlier this month, the vast
majority said Obama was likely to tap Yellen to take over.
Yellen, who has served as Fed vice chair since October 2010,
is considered a forceful advocate of aggressive action to lift
unemployment. If nominated and confirmed by the Senate, she
would be the first woman to lead the central bank.