NEW YORK (CNN/Money) -
The clock is ticking on the Alan Greenspan era, which ends when his term as Fed governor expires Jan. 31, 2006.
And as Fed policy-makers meet Wednesday to weigh their next move on rates, Fed watchers are already speculating on who will succeed Sir Alan -- and how the process will play out over the next 12 months.
A number of highly regarded candidates already with the Fed would probably breeze through confirmation hearings if they were named, resulting in relatively little change in direction in Fed policy, experts on the central bank said.
But a number of outside candidates also on Fed watchers' short lists would likely roil Washington's already turbulent political waters.
The Bush administration has shown with its picks of Condoleezza Rice as Secretary of State and Alberto Gonzales as Attorney General that it is not afraid to nominate people who could spur an unusually high number of 'no' votes during a confirmation process.
But some Fed watchers worry the central bank's power and reputation in world markets could be diminished if there is a political fight over Greenspan's successor.
"Given the dollar's recent declines, it would not be a good thing if the country was seen as not supporting the new chairman," said Robert Auerbach, a University of Texas professor and former staff member with both the House banking committee and the Reagan administration.
But other Fed watchers don't think that even a bruising confirmation battle would hurt the next Fed chairman's authority, and that the administration hasn't shown any indication to shy away from such a fight.
"There seems to be a fight about every nomination that Bush puts up," said Lehman Brothers economist Drew Matus. "But even if it was a 51-49 vote, it's not like they can recall him."
Harvard professor Martin Feldstein, president of the National Bureau of Economic Research, is perhaps the most controversial possible Greenspan successor widely mentioned by Fed watchers.
Democrats would almost certain object to Feldstein's support of private Social Security accounts. But some Bush supporters would also be concerned about Feldstein's past criticisms of large government deficits. Many Fed watchers doubt that Bush would give such a powerful platform to someone who could well be criticizing the administration's spending and tax cut plans.
"Once a person is appointed, they are basically independent," said Lehman's Matus. "If you're president, you want someone who would temper their criticism of you."
But Greg Valliere of the Stanford Washington Research Group said that he thinks Feldstein is the favorite, despite being a controversial choice in some quarters.
"If you look at who the markets would be the most comfortable with, and that has to be one of the top criteria, then Feldstein has got to be the No. 1 pick," said Valliere.
Matus said concerns about criticism could give a lift to a candidate like Glenn Hubbard, a former head of Bush's Council of Economic Advisors.
Lawrence Lindsey, a former Federal Reserve Governor, is also named by some Fed watchers as a Bush loyalist who could be in line for the job. But Lindsey, the architect of the tax cut plan President Bush ran on in 2000, was one of the economic advisors who observers said was forced out of office in December 2002.
One other Bush administration member named by some is John Taylor, the undersecretary of the Treasury for international affairs. Events over the next year could affect his chances, though.
If the dollar were to go into a renewed decline versus other currencies, forcing domestic interest rates or prices sharply higher, as some economists fear, that would probably doom Taylor's chances. And one Fed watcher, who asked the his name not be used, said that Taylor's star has fallen in his time at Treasury.
"When he was appointed (to Treasury) it was with the expectation that he would be the next Fed chairman. But he had his shot and he blew it," said the Fed watcher. "He hasn't stood out as a leader in the administration, which he was expected to do."
The Fed governor most widely mentioned as being Greenspan's successor is Ben Bernanke.
"His speeches are well thought out. After Greenspan, he's the one whose comments are most closely watched by the markets," said Matus.
Valliere said there are rumors that Bernanke may leave the Fed soon to become the chairman of the White House Council of Economic Advisors. That move could build support for him within the Bush administration but could also make him a more political, and thus controversial, choice, Valliere said.
Fed Vice Chairman Roger Ferguson would be one Democrat with a chance at the top job. He's not seen as partisan, and it would allow Bush to make history by appointing the first African American to the high-profile post.
Ferguson also won praise for his performance on Sept. 11, 2001, when, with Greenspan in Europe during the attacks, Ferguson was involved in making some of the minute-to-minute decisions that day.
"I think Ferguson might be the best vice chairman we've ever had," said Mark Vitner, economist with Wachovia Securities.
But Ferguson also is seen lacking a strong policy reputation with investors.
"Ferguson is very operationally oriented," said Matus. "I think that's a role the Fed needs, but I'm not sure that's what administration is looking to put into the top spot."
The person at the Fed seen as being closest to Greenspan is Donald Kohn, who was a long time Fed staff member before being named a governor in August 2002.
"Don Kohn is the closest thing to a Greenspan clone that modern science has produced," said Matus.
But whether Kohn has the reputation with the markets or within the administration is an open question. If Greenspan's input influences the administration, that could give Kohn a leg up.
Whoever is tapped as the next chairman will have a term that extends beyond Bush's time in office. The chairman spot is for four years, and a chairman can be reappointed as long as his or her 14-year term on the board of governors continues.
The expiration of Greenspan's 14-year term is what's forcing his retirement. And the next chairman, as always, will have a great deal of ability, perhaps more than the president, to directly affect the economy.
"Hiring a Fed chairman is like firing a missile. There's no recall button," said Matus.