The Senate has approved the nomination of Janet Yellen to run the Federal Reserve. As the first woman who will serve as chair of the central bank in its 100-year history, she is set to take control of the Fed as it begins winding down the measures taken during the financial crisis. The vote was 56 to 26 in the Democrat-controlled Senate. Bad weather kept some Senators away from the session.
While the Fed plans on tapering asset purchases this month, most members of its committee believe it won't be until 2015 that short-term interest rates will rise from their current low levels.
In a statement after the evening vote, Senate Banking Committee Chairman Tim Johnson, D-S.D., said, "Americans should feel reassured that we will have her at the helm of the Fed as our nation continues to recover from the Great Recession." She begins a four-year term Feb. 1.
"She comes in ready to take over, and I think that's a good thing," says Amy Crews Cutts, chief economist at Equifax. "The big task is how does the Fed unwind the not only unprecedented but magnificent scale of the intervention they've put into the market," she says.
Also on the Fed "to-do" list is naming a new vice chair to succeed Yellen. Published reports indicate the White House is poised to nominate former International Monetary Fund official Stanley Fischer, highly regarded for his knowledge of responses to international financial crises.
The Fed's next policy-setting meeting is scheduled for the end of January. After that, Yellen's first meeting as chair is set for March 18-19, capped by a news conference. As for a change in management style, Cutts says any differences may be subtle. "She'll put her own flavor on it, but I think she'll be very consistent with what Bernanke has said and done," says Cutts. She says the differences will be akin to the "flavoring of spices, as opposed to a fundamentally different dish."
Do you expect that Janet Yellen will make big changes at the Fed? What do you think of Ben Bernanke's legacy?
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