Ben Bernanke is to be reappointed for a second four-year term as chairman of the Federal Reserve, according to a White House official.

President Barack Obama will make the announcement on Tuesday in Martha's Vineyard, where he is on holiday with his family. The decision is the ultimate seal of approval for the Fed chairman, who was originally appointed by George W Bush, the Republican former president, and whose reappointment was seen as far from guaranteed.

It follows Mr Bernanke's extraordinarily aggressive efforts to fight the economic crisis, including radical interest rate cuts, loans to non-bank financial institutions, Fed-led bailouts of Bear Stearns and AIG and gigantic asset purchases – exploiting the Fed's powers to their legal limits in a bid to prevent a second Great Depression.