Obama to name Yellen as next Fed chair on Wednesday
Updated: 2013-10-09 09:05
WASHINGTON - President Barack Obama will announce his choice of Federal Reserve Vice Chairwoman Janet Yellen to be the next head of the U.S. central bank on Wednesday, putting her on course to be the first woman to lead the institution in its 100-year history.
If confirmed by the U.S. Senate, Yellen would replace Ben Bernanke, whose second four-year term as head of the Fed expires on January 31.
Obama is due to make the announcement at the White House at 3 p.m. EDT (1900 GMT), a White House official said on Tuesday. Bernanke is also scheduled to attend.
Yellen has been a forceful advocate of aggressive action to drive down unemployment and would provide continuity with the policies the Fed has established under Bernanke. Now her main challenge will be to steer policy back to a more normal footing and slowly wind down the extraordinary measures taken in the five years since the financial crisis.
The former professor has a long history in the top ranks of economic policymaking, including her service over the past three years as the Fed's No. 2 official.
Yellen, 67, would have to oversee the tricky process of reversing the extraordinary stimulus the U.S. central bank put in place to shore up the world's largest economy, which eclipses Japan and China put together.
If she wins the Senate's backing, as expected, she would join the Fed's honor roll along with such household names as Paul Volcker and Alan Greenspan, predecessors as head of an institution that can influence the course of the world economy.
"She's an excellent choice and I believe she'll be confirmed by a wide margin," said Senator Charles Schumer, a Democrat from New York.
U.S. stock index futures rose on the news.
"The market will be mildly pleased," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel. "She uses the same playbook as Bernanke, and the market should not expect any change to the status quo."
Obama turned to Yellen after his former economic adviser Lawrence Summers withdrew from consideration amid fierce opposition from within the president's own Democratic Party, raising questions about his chances of congressional confirmation.
In contrast, Yellen has enjoyed strong support from Democrats. In an unusual move, 20 Senate Democrats signed a letter earlier this year pressing Obama to turn to the former professor from the University of California at Berkeley.
Her backing on the Republican side of the aisle is much softer. Many Republicans worry the Fed's policy of holding overnight interest rates at zero and the massive bond purchases it has pursued to drive other borrowing costs lower threaten to create asset bubbles and spark an unwanted pickup in inflation.
Still, Yellen is expected to garner enough support to secure the 60 votes needed to overcome any procedural hurdles in the 100-seat Senate. Democrats control the chamber 54-46.