WASHINGTON — President Bush nominated Alan Greenspan for a fifth term as chairman of the Federal Reserve Board on Tuesday, saying the central banker had done a "superb job" of managing the economy.
The appointment, telegraphing an election-year message of steadiness to financial markets, was announced as the 78-year-old Greenspan, who has served since 1987, met with Bush at the White House.
"Alan Greenspan has done a superb job as chairman . . . and I have great continuing confidence in his economic stewardship," Bush said in a statement.
In language designed to laud Greenspan and help his own political fortunes, Bush said Fed policies were a reason "America's economy is now growing at the fastest rate in two decades."
In a brief statement, Greenspan said he was "honored" and would continue as chairman if confirmed by the Senate, as expected.
Given that the White House initially announced Bush's intention to nominate Greenspan to another four-year term as chairman in April 2003, the only suspense has been why the formal announcement took so long. His current term as chairman expires June 20.
Greenspan's appointment to the central bank ends Jan. 31, 2006. At that point, term limits kick in, and he must leave the Fed once a successor is confirmed — though that could take some time. If Greenspan, who makes $174,500 a year, leaves in January 2006, he would be the second-longest serving chairman, behind William McChesney Martin, who served from 1951-70.
Greenspan is credited for policies that helped juice the economic boom of the 1990s. He is also faulted by some for not doing enough to pop the stock market bubble.
The long-anticipated announcement comes on the heels of a May 7-9 USA TODAY/CNN/Gallup Poll showing 41 percent of Americans approve of Bush's handling of the economy. Public approval is tepid even though the economy is expanding so rapidly that the Fed's policymaking Open Market Committee is widely expected to raise interest rates, for the first time since 2000, when it meets June 29-30.
Speaking to a banking group Tuesday, Alfred Broaddus, president of the Federal Reserve Bank of Richmond, said the Fed is paying close attention to rising inflation, the product of a stronger economy.
"I'm dusting off my old inflation hawk feathers in case I have to flap my wings one more time before I leave the Fed," said Broaddus, who retires in July.
However, Broaddus added that inflation is still restrained enough that the Fed, which has cut rates to a 45-year low of 1 percent, can probably raise them at a measured pace.