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Obama wants some 'space' to make Fed decision

The sun rises to the east of the U.S. Federal Reserve building in Washington, July 31, 2013. REUTERS/Jonathan Ernst
The sun rises to the east of the U.S. Federal Reserve building in Washington, July 31, 2013. REUTERS/Jonathan Ernst

By Jeff Mason

VINEYARD HAVEN, Massachusetts (Reuters) - U.S. President Barack Obama wants some "space" to make a decision on who to nominate to replace Ben Bernanke as chairman of the Federal Reserve when his term expires in January, a source familiar with the process said.

Obama is considering a handful of candidates for the top job at the U.S. central bank. The front-runners are believed to be former Treasury Secretary and Obama economic adviser Larry Summers and current Fed Vice chair Janet Yellen.

White House officials were annoyed when a group of Democrats in the U.S. Senate wrote a letter to Obama strongly urging the president to pick Yellen.

White House deputy chief of staff Rob Nabors addressed the issue with Senate Majority Leader Harry Reid's chief of staff, David Krone, the source said. Reid's staff reiterated that he would support the president's choice, no matter who he picks.

Obama said last week he would make his decision in the fall. During a press conference he also defended Summers - as he did with Democrats on Capitol Hill - and said he was being unfairly maligned.

Summers was a top economic adviser to Obama during the first half of his first term.

Liberal-leaning critics have knocked Summers for his role in spearheading financial deregulation in the 1990s and for not pushing for a greater amount of stimulus funds from Congress in 2009.

"The president hasn't raised the issue of the letter specifically, but believes he needs space to make a final decision," the source said.

"At the same time, what he has been unhappy about are what he views as unfair attacks against Larry, and has felt compelled to defend Larry, who was a key member of his team during a very difficult time," the source said.

Obama is on vacation on the Massachusetts island of Martha's Vineyard. He returns to Washington on Sunday and plans to take a bus tour next week to continue a series of speeches about the economy.

White House spokesman Josh Earnest did not answer directly when asked whether Obama was meeting with any of the potential Fed candidates while on vacation.

Four years ago, when Obama announced his reappointment of Bernanke to the Fed chair post, he did so while on vacation on Martha's Vineyard.

"The president has made clear that he doesn't intend to make any decisions about his Fed chair nominee until the fall," Earnest told reporters.

"The vast majority of the president's time this week will be focused on enjoying a little downtime outside of Washington, D.C., on the golf course and with some friends and with his family," Earnest said, adding Obama did not want an open audition for the job.

(Additional reporting by Steve Holland; Editing by Vicki Allen)

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