federal reserve

Janet Yellen: The new Federal Reserve chair

A new Federal Reserve boss
A new Federal Reserve boss © spirit of america/Shutterstock.com

Janet Yellen has taken her oath of office, becoming the 15th person and the first woman to chair the Federal Reserve in its 100-year history.

The Fed boss holds one of the most powerful jobs in the world. Most pronouncements by the central bank reflect the chairman's wishes, even though decisions about monetary policy are made by committee.

The Fed controls the supply of money, sets targets for short-term interest rates and regulates private banks. Its mandate is to keep unemployment low, prices stable and the economy growing.

President Barack Obama faced a huge decision when it was time to replace Ben Bernanke after his eight-year tenure as chairman. The president chose to promote Yellen, who was the Fed's vice chair.

"The Federal Reserve is incredibly relevant to everyone's day-to-day life," says Greg McBride, CFA, chief financial analyst at Bankrate.com. "A new Federal Reserve chairman is more significant to Americans, in terms of their pocketbooks, than the changing of the president."

The Fed's work affects your job stability, the performance of your 401(k) and how much you spend at the grocery store, McBride says.

Who has led the Fed? Here are profiles of Yellen, Bernanke and his predecessor, Alan Greenspan.

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