Obama wants some 'space' to make Fed decision: Report

VINEYARD HAVEN, Massachusetts (REUTERS) - US President Barack Obama wants some "space" to make a decision on who to nominate to replace Mr Ben Bernanke as chairman of the Federal Reserve when his term expires in January, a source familiar with the process said.

Mr Obama is considering a handful of candidates for the top job at the US central bank. The front-runners are believed to be former Treasury Secretary and Obama economic adviser Larry Summers and current Fed Vice chair Janet Yellen.

White House officials were annoyed when a group of Democrats in the US Senate wrote a letter to Mr Obama strongly urging the president to pick Yellen.

White House deputy chief of staff Rob Nabors addressed the issue with Senate Majority Leader Harry Reid's chief of staff, David Krone, the source said.

Mr Reid's staff reiterated that he would support the president's choice, no matter who he picks.

Mr Obama said last week he would make his decision in the fall.

During a press conference he also defended Mr Summers - as he did with Democrats on Capitol Hill - for being unfairly maligned.

Mr Summers was a top economic adviser to Mr Obama during the first half of his first term.

Liberal-leaning critics have knocked him for his role in spearheading financial deregulation in the 1990s and for not pushing for a greater amount of stimulus funds from Congress in 2009.

"The president hasn't raised the issue of the letter specifically, but believes he needs space to make a final decision," the source said.

"At the same time, what he has been unhappy about are what he views as unfair attacks against Larry, and has felt compelled to defend Larry, who was a key member of his team during a very difficult time," the source said.

Mr Obama is on vacation on the Massachusetts island of Martha's Vineyard. He returns to Washington on Sunday and plans to take a bus tour next week to continue a series of speeches about the economy.