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Investments

Yellen approved as Fed Chair with weak support

New chair faces uphill battle, questions on Fed's continuing shepherding

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Janet Yellen was confirmed by the U.S. Senate as the new chair of the Federal Reserve on Monday evening. The final senate vote was 56-26.

Yellen had the least amount of active support in the Senate vote for Fed Chair. Previously, the lowest amount of active supporting votes for Fed Chair was Yellen’s predecessor Ben Bernanke, who only garnered 70 votes in his favor. However, it's notable that Bernanke was actively opposed by fully 30 senators, while Yellen was only opposed by 26. In Yellen's vote, 18 senators did not cast their votes.

Yellen is the first confirmed Fed chief with the option for cloture removed. A cloture vote would have required 60 votes under the old rules for the confirmation to go to the floor. The Senate majority muscled through rule changes in November to limit minority Republicans members' ability to block President Barack Obama’s nominees using the cloture tool.

Most Fed nominations in the 101-year-old institution's history result in unanimous or near unanimous support.

Yellen, 67, a former economist at the University of California at Berkley, has served as vice chair of the Fed since 2010. She is the first Democrat to sit in the big chair since 1987, and the first to face unprecedented opposition in hearings and the final vote despite the Senate being controlled by the party that holds the presidency.

Yellen steps into the role at a time of economic and political uncertainty, and much of the opposition comes from her dogged support of Fed stimulus policies that have swelled the Fed's balance sheet to about $4 trillion by buying bonds with money printed from thin air. Yellen has been a supporter of a more activist Fed and of ongoing stimulus.

Yellen takes office when Bernanke's term expires on Jan. 31.

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