Janet Yellen to be nominated head of Federal Reserve
Janet Yellen will be nominated as head of the Federal Reserve by U.S. President Barack Obama. Yellen is currently Federal Reserve Vice-Chair.
The nomination needs to be confirmed by the U.S. Senate. When the likely confirmation occurs, she will take over from Ben Bernanke, who has been in charge of the Federal Reserve for eight yeas.
Janet Yellen has the backing of most politicians and is expected to win Senate approval by “a wide margin”, according to senator, Democrat Charles Schumer. “I have no doubt she will be an excellent Federal Reserve chairman,” Schumer said.
Yellen has been working as Bernanke’s deputy for the last two years. She will be the Federal Reserve’s first female boss. The Federal Reserve, America’s central banking system, is commonly referred to as the ‘Fed’.
Both Ben Bernanke and Janet Yellen are due to meet with the president today.
Like Bernanke, Yellen is seen as a “dove” – preferring to keep interest rates low to boost the economy and reduce unemployment, rather than focusing more on controlling inflation. Those prioritizing inflation are known as “hawks”.
After former Treasury Secretary Larry Summers withdrew his candidature, Yellen’s nomination became widely expected.
Janet Yellen short biography
- Full name – Janet Louise Yellen.
- Born on August 13th, 1946, in Brooklyn, New York.
- Status – married to George Akerlof, an economist and professor emeritus at the University of California, Berkeley. Akerlof was awarded the Nobel prize. They have one son, Robert Akerlof who is an assistant professor at the University of Warwick, England.
- Education – Yellen graduated from Fort Hamilton High School, Brooklyn. Graduated summa cum laude from Brown University in Economics in 1967, and received her Ph.D. in economics in 1971 from Yale University.
- 1971-1976 – assistant professor at Harvard University.
- 1977-1978 – an economist with the Federal Reserve Board of Governors.
- Since 1980 – carrying out research at the Hass School, as well as teaching macroeconomics to full-time and part-time students. Yellen is today a Professor Emeritus at the University of California, Berkeley’s Haas School of Business.
- 1994-1999 – Federal Reserve System’s Board of Governors.
- 1997-1999 – chair of President Bill Clinton’s Council of Economic Advisers (a group of economy experts that advises the White House on economic matters).
- 2000-2004 – taught at Harvard University and the London School of Economics.
- 2004-2010 – President and CEO of the Federal Reserve Bank of San Francisco. As from 2009, Yellen became a voting member of the Federal Open Market Committee (FOMC).
- 2010 – to date – in April, 2010, Yellen was nominated by President Obama to succeed Donald Kohn as vice-chair of the Federal Reserve System. The Senate Banking Committee voted 17 to 6 in favor.
The immediate challenge for Janet Yellen
As Bernanke’s successor, Yellen’s most immediate challenge will be deciding when and how to taper off the stimulus program which injects $85 billion each month into the economy by buying bonds. This needs to be done eventually, but in a way that does not hurt the economy, which is still relatively fragile.
The Wall St. Journal says that Bernanke, who leaves his post at the end of January, 2014, could make the move before his term expires.
Bloomberg News describes Yellen’s nomination as a reprieve for Asian economies, including South Korea and China, from any immediate reduction of the stimulus program that could unsettle markets and capital flows.
The Economic Times quotes Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel, who said of Yellen’s nomination “The market will be mildly pleased. She uses the same playbook as Bernanke, and the market should not expect any change to the status quo.”