Bernanke's first major piece of business is likely to decide what to do next with interest rates.
Many economists are betting that the Fed, which increased rates for a 14th consecutive time on Tuesday, will raise rates one last time at the next meeting on March 28 -- Bernanke's first as Fed chief. Then, the Fed probably will stand pat for perhaps the rest of the year.
One of the reasons many analysts believe that the central bank will nudge rates up one last time is a feeling that Bernanke will want to show that he is just as much of an inflation-fighter as his predecessor, Alan Greenspan.
"Bernanke will feel the need to look tough in the fight against inflation and a good way to do that is to raise rates another quarter point," said economist David Jones, head of a Denver-area consulting firm.
The oath of office was administered to Bernanke in the Fed's stately board room by vice chairman Roger Ferguson.
For his part, Greenspan, who wrapped up 18 1/2 years as Fed chairman on Tuesday, was scheduled to be at work Wednesday as well, at his new job -- running Greenspan Associates, a private economic consulting firm he is setting up in Washington.
Private economists gave Greenspan high marks, not only for the successful way he handled the economy during his tenure, but also for the smooth transition he provided for Bernanke.
The Fed's goal has been to gradually nudge up the federal funds rate, the interest that banks loan to each other, from 1 percent in 2003, a low going back more than 40 years, to a neutral level where it is neither stimulating nor depressing economic growth.
The Fed's action on Tuesday boosted the funds rate one-quarter percentage point to 4.5 percent, the highest it has been in nearly five years.
Commercial banks quickly followed suit Tuesday by increasing their prime rate, the benchmark for millions of consumer and business loans, to 7.5 percent, also the highest level in nearly five years.
Analysts said if they are correct that the Fed will raise rates only one more time this year, then the prime will end up at 7.75 percent, still below the 9.5 percent peak the prime hit in 2000 during the Fed's last credit-tightening cycle.
Long-term mortgage rates, which are set by financial markets but influenced by the Fed, are expected to rise by a half-point or so by the end of the year. That would put the average 30-year mortgage rate, currently at 6.1 percent, at around 6.6 percent, still low by historical standards.
Some analysts, however, are worried that the Fed may have to go further than one more rate hike if inflation pressures get out of control.
Stephen Stanley, chief economist at RBS Greenwich Capital, said he believed the Fed would not only raise rates in May but perhaps as many as three more times after that.
"We look for strong economic figures and a gradual pickup in core inflation to force several more moves this year," he said.
However, analysts in the one-more-and-done camp argue that the economy is already slowing as rising interest rates begin to cool the red-hot housing market. If the Fed overdoes the tightening, it could cause a more severe slump in housing.
"That could really crimp consumer spending and hold back economic growth," said Greg McBride, senior financial analyst at Bankrate.com, an online financial service.
One hint, these analysts say, that the Fed is close to ending its rate hikes was a small change in the wording of Tuesday's statement. The Fed said future rate increases "may be needed" to fight inflation, when in December the Fed said such rate hikes were "likely to be needed."
More about the Fed's intentions will be known on Feb. 15 when Bernanke is scheduled to give the Fed's twice-a-year monetary report to Congress. Analysts look for him to signal a strong bond with Greenspan, especially in the area of fighting inflation.
In saying good-by on Tuesday to hundreds of Fed staffers at a reception, Greenspan told them they had an important job to do in protecting the dollar against the ravages of rising prices.
"We are in charge of the nation's currency," Greenspan said. "The central bank, because of that, is involved in everyone's daily lives. We are the guardians of their purchasing power."