President Obama Nominates Yellen as New Fed Chair

President Obama nominated Janet Yellen as the new chairman of the U.S. Federal Reserve on Wednesday, Oct. 9. Pending Congressional confirmation, she will succeed current chair Ben Bernanke, whose term expires on Jan. 31, 2014.

Yellen, 67, has been vice chairman of the Fed since 2010 and would be the first female leader in the bank’s 100-year history. She was a “key architect” in the creating the federal stimulus plan known as quantitative easing, according to Bloomberg.

Democrats are expected to support Yellen’s nomination. 

“President Obama’s choice in nominating Janet Yellen to lead the Fed is both historic and important for our nation’s economy,” said Congresswoman Maxine Waters (D-Calif.) in a statement. “Ms. Yellen’s experience as a former Chair of the Council of Economic Advisers, Regional Fed Bank President, and Vice-Chair of the Federal Reserve make her one of the most people ever to be nominated.” 

Yellen’s appointment would produce a fluid transfer of the reins, economists say. 

“Yellen would be the smoothest transition to power, continuing the Bernanke legacy and a welcomed calm as markets try and handicap the Fed’s next policy move,” said Lindsey Piegza, managing director and chief economist at Sterne Agee. 

In some 2012 speeches, Yellen explained the possibility of needing to continue stimulus efforts even after quantitative easing—the program through which the Fed buys $85 billion of bonds from the U.S. Treasury each month—purchases wind down. 

Republicans may oppose her confirmation based on her record. 

“I voted against Vice Chairman Yellen’s original nomination to the Fed in 2010 because of her dovish views on monetary policy,” said Senator Bob Corker (R-Tenn.) in statement. “We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed.”

In September, the Federal Open Market Committee decided to maintain the size of the stimulus program despite previously hinting that it would begin reducing the size of bond purchases. 

However, if Yellen is confirmed as chairman, she will be tasked with leading the unwinding of the stimulus program, Bloomberg predicts. Bernanke has previously said the Fed will continue holding short-term interest rates near zero until the employment rate drops to at least 6.5%. 

The appointment announcement took place Wednesday afternoon in Washington, D.C.

Read more at Bloomberg. 

Written by Alyssa Gerace 

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