Few people have more influence over the U.S. economy than the Federal Reserve chair, and on Wednesday, Janet Yellen became the first woman nominated for the post.
Yellen, if approved by the Senate, will replace Federal Reserve Chairman Ben Bernanke when his term end in January. For much of the summer, speculation about a successor centered on Yellen, the current Fed vice chair, and economist Larry Summers, a former Harvard University president an adviser to President Barack Obama. But by mid-September, it was clear the more overtly partisan Summers could not win Senate confirmation. He withdrew from consideration, and it became a matter of time until Obama nominated Yellen.
Yellen’s confirmation is widely expected — the Democratic-majority Senate approved her for her current post in 2010. But she played a key role in some of the more activist recession-fighting measures implemented during Bernanke’s tenure, including a massive bond-buying program known as quantitative easing. Some Republicans believe such policies are actually holding back the recovery, and they are likely to question Yellen closely about them during her confirmation hearing.
Winning Senate approval is only the first challenge for Yellen. If confirmed, she will have to marshal the Fed’s sometimes fractious board of governors toward consensus, decide when and how to ease off stimulus without causing a market meltdown and deal with any economic fallout from the current congressional budget battle. Above all, she will have to remember to carefully watch her words: Every public remark by the Fed chair is parsed by an army of analysts, and can have potent — and sometimes unintended — effects.
Sources: McClatchy Newspapers, New York Times, Wall Street Journal, Associated Press