Near-Unanimous Support Expected For Fed Nominee

Ben S. Bernanke, the White House adviser nominated to be Federal Reserve chairman, pledged to carry on Alan Greenspan’s interest-rate policies and to move toward more openness if the Senate confirms him for the job.“With respect to monetary policy, I will make continuity with the policies and policy strategies of the Greenspan Fed a top priority,” the 51-year-old Mr. Bernanke told the Senate Banking Committee at his confirmation hearing.On one issue where Mr. Bernanke and Mr. Greenspan do differ, Mr. Bernanke suggested the Fed adopt a specific inflation target.“Providing quantitative guidance about the meaning of `long-term price stability’ could have several advantages,” such as providing more clarity about the direction of interest rates and capping fears of future inflation, he said.Mr. Bernanke, a former Princeton University professor who served as a Fed governor and is now President Bush’s top economic adviser, would take over after Mr. Greenspan’s non-renewable term ends January 31. Senator Shelby, an AlabamaRepublican and committee chairman, said he expects to set a panel vote on the nominee this week, and members from both sides predicted easy approval.“It’s a no-brainer,” Senator Carper, a Delaware Democrat, said in an interview. “He’s going to get, I suspect, unanimous support, certainly in our committee, and very well could get it in the entire Senate. He’s got it all.”Mr. Bernanke said a key goal of the Fed, controlling inflation, would remain unchanged. “Ensuring long-run price stability is essential for achieving maximum employment and overall economic stability,” Mr. Bernanke said. While an explicit numerical inflation goal would be a step “toward greater transparency,” he also said he wouldn’t act quickly to make that change.U.S. Treasury notes rose after Mr. Bernanke’s comments bolstered investors’ confidence that he won’t tolerate faster inflation just to keep the economy growing. The yield on the benchmark 10-year note fell 5 basis points to 4.56% at 6:35 p.m. in New York, according to Cantor Fitzgerald.Mr. Bernanke’s campaign for more transparency included a commitment to better communication by the Fed. “I will try to speak clearly on all occasions,” he told the committee.Mr. Bernanke faced repeated questions from Senator Sarbanes of Maryland on the relationship between an inflation goal and job growth, and from Senator Dodd of Connecticut on the potential risks of overseas investors holding U.S. government bonds. Mr. Sarbanes and Mr. Dodd are both Democrats.Mr. Bernanke showed he could “hold his ground,” Bill Gross, manager of the world’s biggest bond fund and chief investment officer at Pacific Investment Management, said in an interview. “He demonstrated a willingness to stand up for his own views as opposed to laying down like a carpet.”Mr. Bernanke said the economy was performing well, even after the surge in energy prices following the recent hurricanes. “There are some risks in the near-term, but I think the baseline looks reasonably strong,” he said. The Fed should make sure that higher energy prices don’t seep into the prices of other goods and services, he said.

Near-Unanimous Support Expected For Fed Nominee

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