BulletProofBlog the blog on crisis communications

Yesterday, the Senate Banking Committee voted 16-7 to send Ben Bernanke’s nomination for a second term as Chairman of the Federal Reserve to the full Senate. While the panel’s backing of the Fed Chairman will almost certainly lead to another term for Bernanke, the clarion message this relatively smooth process sent to the marketplace was equally important.

That message of stability and the elimination of any unforeseen (and negative) developments is just the type of continuity Wall Street, Washington, and the country need right now.

Indeed, to articulate a lack of confidence in the Fed Chairman at a time when recovery is nascent would likely have had disastrous effects on the global economy. Currently, the markets writ large are yearning for steady monetary policy and regulation, and certainly not escalating questions about what a change at the Fed would mean.

According to economist Michael Feroli of J.P. Morgan Chase, “The market has already internalized the fact that there’s a lot of political opposition to Bernanke and to the Fed in general. That hasn’t been pleasant for the market and it probably has already adversely affected inflation expectations and the value of the dollar.”

The vote also points to the fact that the Fed continues to retain a measure of power and prestige amid high-profile criticism of the steps it took to avert economic disaster last year.

The only thing that markets dislike worse than a downward trajectory is a murky future. Uncertainty is the worst possible outcome. With its vote to send Mr. Bernanke’s nomination to the full Senate, the Banking Committee provided the markets with clarity in an uncertain time.

Michael W. Robinson is Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm, and a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.