MercoPress. South Atlantic News Agency

Bernanke de-personalizes his job: the Fed a ‘terrific team’ and ‘no single person is essential’

The Fed trimmed its 2013 and 2014 economic growth forecasts for the US

Federal Reserve Chairman Ben Bernanke admitted speaking to President Barack Obama about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the US economy.

“I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said when asked at a news conference in Washington if he’s discussed his plans with President Obama. His term expires at the end of January 2014.

“I’ve spoken to the president a bit, but I really don’t have any, I don’t really have any information for you at this juncture” said Bernanke when asked about a third four year term. The former Princeton University professor also said he didn’t feel personally responsible to lead the Fed when it unwinds its balance sheet.

Bernanke, a student of the Great Depression, took steps unprecedented in the Fed’s 100-year history to steer the economy through its worst crisis since the 1930s.

He used the Fed’s balance sheet to rescue Bear Stearns Cos. and American International Group Inc. (AIG) from collapse, while supporting corporations and small businesses with innovative lending programs that kept credit flowing as banks struggled under rising amounts of home-loan delinquencies.

He cut the benchmark lending rate to zero in December 2008 to boost the economy and then continued to provide stimulus with outright bond purchases, expanding the Fed’s total assets to a record 3.17 trillion dollars.

“You can thank Ben Bernanke that we are not in a global depression,” Bank of Israel Governor Stanley Fischer said on June 27.

Bernanke also said at the press conference that one of the things he hoped to accomplish and was “not entirely successful at, as the governor or as the chairman of the Federal Reserve, was to try to depersonalize to some extent monetary policy and financial policy and to get broader recognition of the fact that this is an extraordinary institution.”

“It has a large number of very high-quality policy makers, it has a terrific staff, literally dozens of PhD economists who’ve been working through the crisis, trying to understand these issues and implement our policy tools,” Bernanke said. “And there’s no single person who is essential to that.”

On Wednesday the Fed Open Market Committee after a two-day meeting kept its easy monetary policies in place saying high unemployment and the government's sharp spending cuts remain barriers to full recovery from the 2008 crash.

The Fed statement said that US economic growth had rebounded from the flat 2012 fourth quarter to a moderate pace in recent months, but with Europe in fresh turmoil and the US government slashing spending to close the fiscal deficit, the FOMC trimmed its 2013 and 2014 economic growth forecasts.

The committee “remains concerned that restrictive fiscal policies may slow economic growth and job creation in coming months” Bernanke said at the news conference after the meeting, referring to the US government's “sequester” budget cuts that began on March first.

In addition, he said, “at 7.7%, the unemployment rate remains elevated.”

He noted that higher taxes from the beginning of the year and various measures to cut spending will reduce some 1.5 percentage points from growth this year “which, of course, is very significant”.