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President George W. Bush on Monday selected Ben Bernanke, chairman of the president's Council of Economic Advisers, to replace Alan Greenspan as Federal Reserve chairman.
Greenspan, who took over in August, 1987, wraps up his term as chairman Jan. 31.
Bernanke, 51, is a former member of the Fed board. He also was a professor at Princeton University and chairman of the economics department.
Bernanke and Greenspan differ on whether the Fed should set targets for inflation - Bernanke thinks it should, Greenspan does not - but otherwise they share a similar philosophy. In fact, while he was at the Fed, market observers would often look at Bernanke's speeches for insight into Greenspan's thinking.
Announcing Greenspan's successor provided a diversion for a White House reeling under congressional criticism of the Harriet Miers' Supreme Court nomination and a federal investigation into whether top officials leaked the name of a CIA operative for political purposes.
The appointment is subject to Senate confirmation.
The US stock market reacted favorably to word that Bernanke was Bush's pick. The benchmark Dow Jones industrial average jumped 60 points minutes after Bernanke's name leaked out and was up 110 points at midday, more than 1 percent.
Bernanke has a reputation as a straight-talking economist and a Republican who avoids telegraphing any ideology.
In June 2005, Bernanke was sworn in as chairman of the President's Council of Economic Advisers. He had served as a member of the board of governors of the Fed since August 2002,
A summa cum laude graduate of Harvard University in 1975, he received his doctorate from the Massachusetts Institute of Technology in 1979. During his years in Boston, he focused on the economic underpinnings of the Great Depression and the losing track record of the city's beloved baseball team, the Red Sox.
"Economics is a very difficult subject," Bernanke once said. "I've compared it to trying to learn how to repair a car when the engine is running."
At the Fed, Bernanke has pushed for the central bank to be more specific in its inflation objectives. Greenspan has opposed setting a numerical target for inflation.
Bernanke also has championed openness at the Fed - a policy that Greenspan has advanced prominently.