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"Frankly, I think both Larry Summers and Janet Yellen are highly qualified candidates. There are a couple of other candidates who are highly qualified as well. I'll make the decision in the fall," he told a press conference.
The term of current Fed Chairman Ben Bernanke expires on January 31, 2014 and Obama's remarks made quite clear that he will not serve a third term, even though Bernanke has not said anything in public about his future plans. A Fed spokeswoman said that remained the case.
Summers, a former top Obama economic adviser, has come to be viewed as the leading contender for the job, but the president insisted that he had still not made up his mind.
"I think the perception that Mr Summers might have an inside track simply had to do with a bunch of attacks that I was hearing on Mr Summers preemptively - which is sort of the standard Washington exercise - that I don't like," Obama said.
The president has spoken to Democratic lawmakers in defense of his former White House National Economic Council director after around 20 Democratic senators signed a letter that was sent to him in support of Yellen as the next Fed chief.
Both are highly regarded economists.
The post requires Senate confirmation and Fed-watchers think the president will announce his choice in late September or October in order to give senators ample time to deliberate.
Obama also set off a small storm on Twitter when he initially referred to Yellen, the Fed's vice chairwoman, as "Mr Yellen" before correcting himself to call her "Miss Yellen".
If chosen, Yellen would be the first woman to lead the U.S. central bank. Some of her supporters raise this as an issue and contrast it with complaints against Summers that stem from remarks he made while president of Harvard in 2005.
Summers, in comments he said were deliberately provocative, had noted that the reason fewer women enter the sciences and engineering than men may be due to a lack of aptitude. He was fiercely criticized for being sexist.
RANGE OF CANDIDATES
Although Obama only mentioned Yellen and Summers by name at the White House press conference, lawmakers who met privately with the president last month said he was also considering former Fed Vice Chair Donald Kohn. Former Fed Vice Chair Roger Ferguson is also viewed as a likely contender, as is former Israeli central bank chief Stanley Fischer.
Obama also spelled out that whoever gets the job ought to give equal weight to tackling inflation as to seeking full employment, the two sides of the central bank's dual mandate, but he argued that unemployment was currently the more pressing concern.
"Right now, if you look at the biggest challenge we have, the challenge is not inflation. The challenge is we've still got too many people out of work, too many long-term unemployed."
Obama also talked about the need for a sound dollar, which was how Summers frequently talked about the U.S. currency while he was U.S. Treasury Secretary under President Bill Clinton.
Yellen is viewed as somewhat more dovish in her monetary policy preferences than Summers, in terms of how she would weigh the need to keep inflation in check versus run a relatively looser monetary policy that would generate more employment.
On the other hand, the substantive monetary policy differences between them are not seen as terribly large.
