Federal Reserve vice-chair Janet Yellen has officially been designated by US President Barack Obama to be the next head of the US central bank. He praised her as one of the US’s foremost economists and policy makers. Ms Yellen said if her position is confirmed by the Senate she would do her best “to promote maximum employment, stable prices and a stable financial system”. She said more action needed to be carried out to support and reinforce the US economy although progress had been made recently.
The president commended Ms Yellen’s ability to build relationships and lend an ear to competing perspectives. He said in her statement that she was “committed to increasing employment and understands the human costs when Americans can’t find a job”. If Obama’s selection is confirmed by the US Senate, Ms Yellen, 67, would soon replace Ben Bernanke, who has held the position for eight years.
Ms Yellen has served as his deputy for the two years that have passed, and would become the first woman to head the Federal Reserve. She has previously taught at Harvard University and the London School of Economics, as well as holding a series of senior regulatory posts in the US.
In terms of financial outlook, Ms Yellen, is seen as a “dove”, which means she prefers to prioritise promoting employment by keeping rates low rather than worrying too much about inflation. Her assignment had been widely foreseen since former Treasury Secretary Larry Summers withdrew his candidature last month. As Democrats have a tight grip on the 100-seat Senate, Ms Yellen’s appointment would only need six Republican votes to overcome any potential procedural obstructions. On the other hand, some critics are scrutinising her views on monetary policy and her support for previous federal stimulus efforts.
A powerful Republican figure in the Senate recently questioned whether she was the right choice. “Ms Yellen subscribes to the liberal school of thought that the best way to handle our nation’s fiscal challenges is to throw more money at them,” John Cornyn of Texas, the Republican whip in the Senate, said similarly in a statement. “This stimulus obsession is the reason the nation finds itself in the fiscal calamity it does today, and the last thing we need is a leader at the helm of the Federal Reserve who is intent on more quantitative easing that harms our economy.”
Senior Congressman Bob Corker, a leading Republican on the banking committee, said in the following statement: “I voted against Vice-Chairman Yellen’s original nomination to the Fed in 2010 because of her dovish views on monetary policy. We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed.”
However, Democrat Senator Charles Schumer insisted that Ms Yellen would win the Senate confirmation “by a wide margin”. Tim Johnson, the esteemed chairman of the US Senate banking committee, said she had “a depth of experience that is second to none”. “I have no doubt she will be an excellent Federal Reserve chairman,” he further added.