US Senate confirms Yellen as Fed's chair

CNC
Added On January 8, 2014

U.S. Senate on Monday confirmed Janet Yellen as the next head of the Federal Reserve, to replace the outgoing Fed chairman Ben Bernanke whose term ends at the end of this month.

The Senate voted 56-26 to approve the confirmation, with 11 Republicans joining Democrats in voting for Yellen.She will take the reins of the world's largest economy and become the most powerful person in the world of finance. 

Yellen, currently the Fed's vice chair, will also become the first woman to take the helm of the U.S. central bank in its 100-year history.

She was nominated by U.S. President Barack Obama for the post in October and will be the first Democrat to serve as chair person since 1987.

SOUNDBITE (ENGLISH): BARACK OBAMA, US President

"Janet is renowned for her good judgment. She doesn't have a crystal ball, but what she does have is a keen understanding about how markets and the economy work, not just in theory, but also in the real world. And she calls it like she sees it. Janet also knows how to build consensus.  She listens to competing views and brings people together around a common goal." 

Barack Obama says Yellen will be a ``fierce champion'' for the American people. 

Born in 1946, Yellen has been vice chair of the Fed since 2010.

She is considered a skilled economist.

Prior to becoming the Fed's vice chair, Yellen served as president of the San Francisco Federal Reserve Bank.

She also has served a stint on the Fed's board in the 1990s and was a top economic adviser to President Bill Clinton.

In her recent remarks, Yellen voiced concern about high unemployment and spoke in favor of the Fed's bond-buying program as a way to stimulate the economy.

SOUNDBITE (ENGLISH): JANET YELLEN, Fed's vice chair

 "While we have made progress, we have farther to go, too many Americans can't find a job and worry how they will pay their bills, and provide for their families. The Federal Reserve can help it does its job." 

After a string of data pointed to a better-than-expected growth rate, the Fed has just begun normalizing its monetary policy.

In December, the Fed announced that it would start in January to taper its purchases of Treasury and mortgage-backed debt to a pace of 75 billion dollars a month from 85 billion dollars a month.

Richard Sylla,  Financial Historian of NYU Stern School of Business, says Yellen is expected to continue the policy until concrete signs emerge of sustained improvement of the economy and job market. 

SOUNDBITE (ENGLISH): RICHARD SYLLA, NYU Stern School of Business

"Janet Yellen's strength is, I think, she would continue Bernanke's policies and she's been at the Fed, she knows what the policise are and she would be, I think she would give more continuity to what the Federal Reserve has been doing.."

Few doubt Yellen's qualifications to take on the job.

But Sylla believes the central bank has made the right choice.

SOUNDBITE (ENGLISH): RICHARD SYLLA, NYU Stern School of Business

"I've studied that history as a financial historian and it’s very important that the Fed has strong leaders and there have been a number of them. There have been some other cases where the Fed has weak leaders and usually the country gets into a little trouble and the financial system does when the Fed leadership is weak. I would say that the leader of the Fed has to be strong, has to be a good leader that is able to know where the Fed should be going."