Mary Ann Hurley, a bond trader at D.A. Davidson & Co., predicted Bernanke will begin working to counteract those perceptions at his Senate confirmation hearing, which is likely to be held before Thanksgiving.

“Being a Fed chairman is radically different than being a Fed governor or a Council of Economic Advisers chairman or living in academia,” Hurley said. “And once he is faced with the reality of the markets hanging on every word he says and every action he does I’m not sure the label of being soft on inflation is going to stick.”

Marvin Goodfriend, a professor of economics at the Tepper School of Business at Carnegie Mellon who worked with Bernanke at the Fed, said the dovish reputation is undeserved.

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“That deflation risk was not very likely, but should it have happened it would have been very costly,” Goodfriend said. “His public remarks during the period were called for, and I don’t think they say very much about whether he or anyone would be easier on inflation on the upside. ... My own feeling is he personally understands the risks of losing credibility from inflation on the upside very well.”

Goodfriend also said that Bernanke’s idea for setting an explicit inflation target -- highlighted as an area of disagreement with Greenspan -- would be merely an extension of the Fed’s growing efforts to be transparent and open about its policy goals and intentions.

“The Fed has been doing something very close to formal inflation targeting over the past 18 years or so. Making it a little more explicit would be a good thing,” he said. “In any case putting a priority on low inflation is the foundation for effective monetary policy, whatever the goals happen to be.”

Goodfriend also said Bernanke, who has rarely offered his thoughts on political issues or fiscal policy, might try to narrow his portfolio to focus more specifically on monetary policy and issues where the Fed can make a difference.

But that could be tough as he makes the transition into a position where Congress, financial markets and the public at large will seek his guidance on a wide range of economic issues.

Bernanke's first test will begin within weeks, when members of the Senate Banking Committee could grill him on anything from rising budget deficits and future tax cuts to the nation’s trade deficit and energy policy.

“I think that Bernanke will get an intense hearing before the committee, and he ought to get an intense hearing,” Sen. Paul Sarbanes of Maryland, the top Democrat on the banking panel, said Monday.

Bernanke will face “a vigorous examination on both sides of the aisle,” agreed committee Chairman Richard Shelby, R-Ala. But he saw no obstacles to Senate confirmation.

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