Janet Yellen, a key force behind the Federal Reserve’s unprecedented and controversial efforts to boost the U.S. economy, was confirmed by the Senate on Monday to lead the central bank just as it begins to unwind that stimulus.
When she succeeds Ben Bernanke, whose second four-year term as Fed chairman expires on Jan. 31, Yellen will become the first woman to run the Fed in its 100-year history and just one of a handful of women heading central banks globally. She is currently the Fed’s vice chair.
The vote to approve her was 56-26. She won resounding support from Democrats, who were joined by 11 Republican senators. All of the no votes came from Republicans – a sign of discomfort with the U.S. central bank’s unconventional policies as well as the partisan rancor in the Senate against any of President Barack Obama’s nominees.
“With the bipartisan confirmation of Janet Yellen as the next Chair of the Federal Reserve, the American people will have a fierce champion who understands that the ultimate goal of economic and financial policymaking is to improve the lives, jobs and standard of living of American workers and their families,” Obama said in a statement.
The Fed cut overnight interest rates to near zero in late 2008 as the country struggled with a deep recession that left millions of Americans out of work after the financial system imploded. It has quadrupled its balance sheet to more than $4 trillion through a series of massive bond purchase programs meant to push down longer-term borrowing costs.
Yellen, 67, spent years defending those efforts, arguing both as Bernanke’s deputy and before that as head of the San Francisco Federal Reserve Bank that they would reduce borrowing costs and spur hiring and economic growth.
Now those policies appear to be working: the U.S. unemployment rate fell in November to a five-year low of 7 percent and the economy grew in the third quarter of 2013 at its fastest pace in almost two years.
Yellen’s main task in the world’s most powerful financial post likely will be to navigate the central bank’s way out of its extraordinary stimulus, beginning with dialing down its bond-buying program.
In December, Bernanke began the process, leading the central bank to its landmark decision to shave the bond purchases to $75 billion this month from a previous monthly pace of $85 billion.