President Obama made history Wednesday, announcing the nomination of Janet Yellen
as the next chair of the Federal Reserve. Yellen currently serves as vice chair of the Federal Reserve and would replace Ben Bernanke when he steps down in January. If confirmed, Yellen would be the first female chair of the Federal Reserve.
Yellen’s nomination comes after months of public speculation on who the president would pick to follow Bernanke. Early reports indicated the president was planning on nominating Larry Summers, a former economic advisor to the president with close ties to Wall Street. Summers’ potential nomination sparked pushback from Democrats who criticized Summers’ cozy relationship with the banking industry. That pushback resulted in Summers withdrawing his name from consideration in mid-September, citing the possibility of a potentially bruising confirmation battle.
Yellen has served as vice chair of the Federal Reserve since 2010 and is expected to be easily confirmed, even in the current partisan gridlock of the Senate. To that end, the Yellen nomination represents continuity in the Obama administration’s approach to fiscal policy. But Yellen also has a strong background in labor and employment issues, a background analysts believe will help the system evolve to focus more on policies that promote employment and hiring as the
driver of a more sustained economic recovery, rather than battling inflation as has been the primary focus of the Federal Reserve so far.
In the Rose Garden of the White House Wednesday, President Obama called Yellen a “proven leader” who was “tough” and “exceptionally well qualified” to lead the Federal Reserve. In particular, the president pointed to Yellen’s reputation as a consensus builder who was open to new ideas and understood the “human” element in economic policy. “American workers and their families will have a champion in Janet Yellen,” the president said.
In her comments after the nomination, Yellen echoed the president’s focus on working families, promising that if confirmed she would help them make up for lost ground during the recession. “The mandate of the Federal Reserve is to serve all people,” said Yellen, who promised leadership that would include objectivity, integrity, and calls for consensus when setting economic policy.
A hearing date for Yellen’s confirmation has not yet been set.