NEW YORK (Reuters) - A majority of U.S. senators on Thursday voted to confirm Ben Bernanke for a second four-year term at the head of the Federal Reserve.
KEY POINTS: * A total of 70 senators voted to confirm, with 30 voting against. * Bernanke has been credited with steering the U.S. economy through a wrenching financial crisis but is also under fire for policies that set the stage for the turmoil. * He has encountered the stiffest opposition the Senate has put up in the three decades it has voted on nominees to head the U.S. central bank.
MARK VITNER, ECONOMIST, WELLS FARGO ADVISORS, CHARLOTTE, NORTH
“I would breath a sign of relief that it is over. I really think that a lot of people failed to realize the significance of all the Congressional stonewalling on the Fed’s independence and the perception of the Fed’s independence, and the complexity that this could have created in the conduct of monetary policy.
“It is something that should not have been this political. The criticism that the Fed is getting is sort of like criticizing the fire department for kicking down the door to save a house that is burning down, saying ‘they should not have kicked down that door’.
“I’m glad that it is over and I’m also glad that we have got people like Ben Bernanke that don’t just throw up their shoulders and say to heck with it.”
TOM SOWANICK, CHIEF INVESTMENT OFFICER, THE OMNIVEST GROUP,
“Bernanke gets reconfirmed but also gets a vote of low confidence. The 70-30 split highlights the lack of a cooperative spirit in Washington. Politics has reached new lows with respect to confirming the Fed chairman. This was a low vote of confidence because of the 30 who voted against to abstained. The spread was quite large! Congress appears to be distancing itself from the financial crisis and putting most of the blame on Ben Bernanke and Geithner.”
“I think it was expected. You could tell that it was going to happen probably a day ago. I don’t think that it will have much effect on the (stock) market.
“I think the market will cycle right past the Bernanke vote and focus on Amazon and Microsoft earnings.
“He’s going to take further bashing by the politicians, but I don’t think it’s going to affect the market.”
“This is very good news. It gets rid of probably the biggest worry of all for many investors, particularly foreign investors. They’ve been worried because they see Congress starting to interfere with the independence of the central bank. And the conclusion they draw, and me too, is, ‘There goes the currency, the dollar.’ You trust the central bank or you don’t. This confirmation takes that that uncertainty away for many.”
MARY ANN HURLEY, VICE PRESIDENT OF FIXED-INCOME TRADING, D.A.
DAVIDSON & CO., SEATTLE
“We pretty much were figuring by yesterday that he had enough support to get through. It is a good thing because you have a level of uncertainty taken away.
“(In the longer run) he’s firmly in the camp of wanting to keep stimulus in place until we have firm signs that the economy isn’t going to reverse course. I think it’s a good thing for the shorter end of the yield curve and for a steeper yield curve. But I also think he’s in the camp that the stimulus will go when he believes recovery is firmly in place.”
QUINCY KROSBY, MARKET STRATEGIST, PRUDENTIAL FINANCIAL, NEWARK,
“The market had already factored in that he was going to be confirmed. The news has been positive since the weekend, of key bi-partisan support. I think he continues his job the same way he’s been running the Fed.
“As a personality he doesn’t want to get involved in the political arena although in anyway he’s been forced to. I think he’s inclination is do the best job for the economy as the data warrants. It would have been huge event had it (the confirmation) not happened.”
“Paul Volcker got 84 votes when he was voted in for his second term. Alice Rivlin got 57 votes when she was nominated for vice chairman of the Fed. There have been politics in the process before, but this has been the worst electoral showing of any Fed chairman in memory. These things are getting more political so the new normal may be not 90 votes, but 60 or higher.”
WIN THIN, CURRENCY STRATEGIST, BROWN BROTHERS HARRIMAN, NEW
“I see little reaction on the forex markets after (Ben) Bernanke’s confirmation. Despite the hurdles, most expect him to be confirmed. In that sense, it is old news and fully priced in most currency pairs. The surprise, and the impact, would have been much larger if he wasn’t approved.”
“I don’t think it was a big surprise but I think it was a big relief. Markets hate uncertainty and it’s nice to get this out of the way. This takes one issue off the table.”
“The market priced this in, but there had been some fear of a bad re-run similar to when the TARP was voted down for the first time at the height of the financial crisis. But this time the Administration knew there was discontent and they had a week to prepare.”