Two immediate thoughts come to mind about this, one economic and one political:
1) Ben Bernanke is a safe, strong choice, sure to be liked by both the Bond and Equity markets. He has already shown a gift for Jawboning, which has evolved into a key aspect of the Fed Chair’s job. One can only hope that his infamous "printing press" comments — essentially threatening hyper-inflation as a response to Deflationary concerns — was just so much Jawboning.
2) The Fed chair replacement comes amid the tumult of the Harriet Miers Supreme Court nomination, the previous black eye of the FEMA chief Brown — and not even discussing the problematic appointments of the poor planning in Iraq post-War period — this is one appointment that the pro-market White House wouldn’t dream of risking on anything less than a stellar candidate, and that have one in Bernanke. We should expect an easy confirmation.
As a side note, I continue to be stunned by the breadth of the Princeton Economics department continues — not just Bernanke, but Burton G. Malkiel, Alan S. Blinder, Paul Krugman, Alan B. Krueger, Daniel Kahneman (and I have no affiliation with Princeton).