Bernanke's Uncertain Confirmation Looms Over Market

Ben Bernanke's road to confirmation as Federal Reserve chairman for a second term may be a little bumpier than it seemed just a few weeks ago.

Bernanke's first term is set to expire at the end of January, and the timetable for a vote on confirmation for another term is scheduled for no earlier than next week. Bernanke will need 60 votes on his side to retain his spot as chairman of the Fed.

The potential close vote is expected to be the closest since Paul Volcker was confirmed for a second term in 1983 with a vote of 84 to 16. Last month Bernanke received 16 of 23 votes from the Senate Banking Committee. If the entire senate votes at that rate then the chairman would receive 69 votes.

There is a pending risk that a number of Democratic Party members may vote against a second term for him.

"A few Democrats have publicly said they won't vote for Mr. Bernanke's appointment, so you need Republican support," said Senate Majority Whip Richard Durbin, Democrat from Illinois.

The support against Bernanke from the left is being led by Democratic Senators Byron Dorgan of North Dakota and Jeff Merkley of Oregon. Also Democratic voting independent Bernie Sanders from Vermont also plans to vote against Bernanke.

Sanders and many Republican Senators have publicly vowed to stop the chairman from being confirmed for a second term.

Bernanke may not remain as acting chairman of the Fed if the vote gets pushed back beyond the January 31 end of his term. The current Vice Chairman of Governors of the Fed, Donald Kohn may step in as acting chairman in this instance.

So fear that if Bernanke is not confirmed for the second term as Fed Chief, the market could see a sell-off.