Federal Reserve Vice Chair Janet Yellen will make history if she is confirmed by Congress -- a highly likely scenario -- as the central bank's next chairwoman. No woman has ever held the top position at the Fed. President Obama formally nominated Yellen for the position this afternoon.
Yellen became the frontrunner in a very competitive race to succeed current chair Ben Bernanke after former Obama adviser Larry Summers, facing stiff opposition from congressional Democrats, withdrew his candidacy in September. The Daily Ticker has been asking economists, market strategists, Fed historians and fellow financial journalists for their opinions on how Yellen would steer U.S. monetary policy as Fed chief:
Heidi Moore, U.S. finance and economics editor at The Guardian:
"She is an excellent economist. In the Fed forecasting sweepstakes, if you want to call it that, she's done better than almost anybody else. And she's been spearheading the idea of making the Fed transparent, of communicating with the market more clearly.
She won't shake the boat too much and that's really important for the Fed right now when it's at the head of such a huge and difficult stimulus that it's going to somehow break down. You don't want to change too much."
David Stockman, former OMB director during the Reagan Administration:
"Janet Yellen has been in the Fed system her whole life. She drinks the Kool-Aid. She's part of the consensus of people who believe that a 12-person monetary politburo can run the whole United States economy by twisting the dials on interest rates and yield curve and all the rest."
Marina Whitman, member of the President's Council of Economic Advisers in 1972-73 and professor of public policy at the Ford School at the University of Michigan:
"Janet is the most experienced in the way the Fed system works, having had positions at all levels and at different parts of the system. She has proved herself as a brilliant macro-economist. she is better than almost anyone I know in explaining complex issues clearly and comprehensibly. Bernanke established the goal of increased Fed transparency, and Janet is well-suited to implement it."
Bill Gross, co-chief investment officer at PIMCO, via Twitter:
“Now that shes made history how will she shape history? More dovish than Bernanke but runnin outta ammo. Depends on fwd guidance.”
Neil Irwin, author of The Alchemists: Three Central Bankers and a World on Fire:
"Confirmation isn't always the simplest thing in Washington. Janet Yellen, she'll get all the Democratic votes most likely but some Republicans may have some objections to her. The chairman's term is up Jan. 31. You don't want to risk having a snafu where we don't have a Fed chairman for a while."
Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi:
“I think the market has it right that Yellen represents more pro-growth policies for a longer period of time from the Fed. Certainly the strategy of putting America back to work I can see the Fed under Yellen pushing to not raise rates until unemployment gets to the full employment level, somewhere with a five handle for the unemployment rate.”
Jim Bruce, documentary filmmaker, Money for Nothing: Inside the Federal Reserve:
"I feel like she has the right characteristics for leader of the Fed. I think she has a lot of integrity. She's tougher than some people think she might be. I think she'd be willing to stand up to a lot of pressure and I think that's what you want in a Fed leader.”
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