Obama to nominate Ben Bernanke for second Federal Reserve term

Bernanke has brought the US economy 'back from the brink', Obama will say. Photograph: Larry Downing/Reuters

US Federal Reserve chairman Ben Bernanke will be nominated for a second term by Barack Obama later today.

The move was welcomed by analysts who said it would provide stability at a critical time for the economy, ending any lingering concerns about who will lead America's central bank.

Obama will interrupt his holiday in Martha's Vineyard, Massachusetts, to make the announcement with Bernanke at his side at 9am local time (2pm BST).

"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall," the US president will say. "Taken together, all of these steps have brought our economy back from the brink. They are steps that are working."

Bernanke's appointment to a new four-year term must be confirmed by the Senate, which is controlled by Obama's Democrats. An expert on the Great Depression, he has lowered US interest rates to near zero and pumped hundreds of billions of dollars into the economy to lift it out of its deepest downturn since the 1930s. The recession now appears close to an end, but economic recovery is fragile, with unemployment and home foreclosures still rising.

"It's very smart; it will be encouraging for the market," said Jim Awad of Zephyr Management in New York. "He's viewed very positively – he saved us from depression and the economy is recovering. The White House has been shrewd in reappointing him to retain confidence in the recovery of the economy and financial markets."

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