On December 10th, the Federal Reserve met for the last time this year and decided to leave American interest rates unchanged. At the Fed, as well as at the Treasury department, attention is turning to regime change. Insiders are starting to wonder what will happen when Alan Greenspan’s fourth term in office expires in 2004, says The Economist in its latets issue.

Since John Snow, a rail-company boss, was picked this week to replace Paul O’Neill as America’s treasury secretary, the talk in economic and financial circles has been all about the effect his appointment might have on economic policymaking. Among staffers at the Federal Reserve, though, much of the gossip continues to be about when—and whether—they themselves will get a new boss.

The central bank’s current chairman, Alan Greenspan, has been in the job since 1987; his current term expires in 2004. So, along with many Fed-watchers, insiders want to know whether Greenspan will, if he seeks to, be reappointed. If not, then who will replace him and what changes in monetary policy might that bring?

Such concerns are not solely a matter of idle gossip. The recession and the subsequently slow upturn have focused attention on Fed policymaking, with critics arguing that the central bank could and should have done more to curb the excesses of the 1990s boom. For some, Greenspan’s reputation as the pre-eminent central banker of his day was tarnished by the decision not to check what he once called the “irrational exuberance” of the markets.

The perception of over-reliance on one man—Greenspan dominates the policymaking apparatus at the Fed’s headquarters—has encouraged some economists to propose that the Fed adopts an explicit inflation target like the European Central Bank (ECB) or, more particularly, the Bank of England.

The answer to these broader, longer-term questions may lie in how effective the Fed is in dealing with America’s shorter-term problems. Since the economy first ran on to the rocks at the beginning of 2001, Greenspan and his colleagues have moved swiftly and aggressively to reduce the pain.

America’s interest rates were cut 11 times last year, and although the upturn has been slow and uneven it did come relatively quickly—and the downturn was, by historical standards, mild.

When the long run of rate cuts had ended, the Fed insisted that it stood ready to do more if necessary. On November 6th, it backed this pledge up with action when it cut rates by an unexpectedly large half of a percentage point.

It also changed its assessment of future risks to the economy, saying that these were now evenly balanced between weak growth and inflation—a clear indication that no further cuts were then envisaged.

Though surprise can be an important weapon in any central bank’s armoury, the Fed refrained from making another cut at its meeting on December 10th. The bank’s officials felt that the November cut was sufficient stimulus for the time being; the ECB’s belated interest-rate cut of last week did little to alter their thinking—senior Fed members had been publicly urging a European rate cut for weeks.

Data on the American economy continues to be mixed, but for now, the recovery, though erratic, is still evident and the outlook is marginally healthier than last month.