Obama picks Yellen as Federal Reserve chair

Olivier Knox
Yahoo News
FILE - In this Monday, June 3, 2013, file photo, Janet Yellen, vice chair of the Board of Governors of the Federal Reserve System, answers a question from a participant at the International Monetary Conference in Shanghai, China. President Barack will nominate Yellen to replace Federal Reserve Chairman Ben Bernanke. (AP Photo/Eugene Hoshiko, File )

President Barack Obama on Wednesday will nominate Federal Reserve Vice Chairwoman Janet Yellen to become the first woman to lead the U.S. central bank. The announcement comes as a government shutdown and fight over raising the debt ceiling threaten to rattle the fragile economic recovery.

Yellen and Federal Reserve Chairman Ben Bernanke are due to join Obama in the White House’s ornate East Room for the formal announcement at 3 p.m. on Wednesday. The nomination, one of the most important decisions of the president's second term, requires Senate confirmation.

Yellen, 67, has extensive support from Senate Democrats, more than one third of whom signed a letter earlier this year urging the president to pick her. The letter was also seen as a warning to Obama not to pick former Treasury Secretary Larry Summers, an odds-on favorite for the job.

Summers withdrew from consideration in mid-September, amid rising resistance to his possible nomination from some Democrats on the Senate Banking Committee.

 

Those Democrats saw Summers as overly involved in deregulation of the financial sector during then-President Bill Clinton’s term, and insufficiently committed to using the Fed’s power over interest rates to promote job creation.

The White House announcement drew praise from the Senate.

“She’s an excellent choice and I believe she’ll be confirmed by a wide margin,” said Democratic Sen. Chuck Schumer of New York.

 

“Today is a historic moment for the Federal Reserve, for women everywhere, and for all of us who care about job creation,” said Democratic Sen. Sherrod Brown of Ohio, one of Yellen’s most vocal supporters.

The confirmation process will give Republicans the opportunity to challenge Yellen on the Fed’s role as well as to pick over Obama’s economic policy record.