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The Coming Fed Fight

TILBURG – There is no longer much doubt that Mitt Romney will be the Republican Party’s nominee to challenge President Barack Obama in the United States’ presidential election in November. If Romney wins, 2013 will most likely be Ben Bernanke’s last year as Chairman of the Federal Reserve.

Indeed, since the Republican primaries began, every candidate has indicated that Bernanke must go. Romney is no exception, claiming that Bernanke has overinflated the money supply, and saying that, “I’d be looking for somebody new.”

Bernanke’s current term as Chairman will end at the beginning of 2014. While he could remain a board member until 2020, he would surely resign immediately if he were not re-appointed.

But, even if Romney wins the election and follows through on his pledge to replace Bernanke, he would still face a strongly Democratic Fed. Indeed, even if Romney served two terms as president, the Fed would lean to the left, because Obama has either appointed or re-appointed five of its Board of Governors’ seven members: Bernanke, who was re-appointed in 2009; Vice Chair Janet Yellen, the second most powerful board member, whose term ends in 2024; Daniel Tartullo, who will step down in 2022; Sarah Bloom Raskin, who will serve until January 2016; and Elizabeth Duke, whose term ended in January of this year, and whom Obama will likely nominate for a new 14-year term.