In what has been suspected for the last couple of weeks President Barack Obama will formally nominate Janet Yellen as the next Chair of the Federal Reserve Bank on Wednesday, Oct. 9, 2013 at a 3 p.m. ceremony in the East Room of the White House, an administration official confirmed on Tuesday, Oct. 8. Yellen is currently the Reserve's Deputy Chairperson, and would maintain most of the policies her predecessor, Ben Bernanke implemented. Bernake is ending his eight year term on Jan. 31, 2014. News of her nomination has already helped American stock futures, and the Asian markets early on Wednesday morning.
Ever since Lawrence Summers announced on Sept. 15 that he was withdrawing from consideration for the position, Yellen was considered the next logical choice and lock for the nomination. Obama's former chief economic adviser had faced fierce opposition from Democrats all throughout the summer, every time Obama indicated he was might nominate Summers for the post.
Democrats were against Summers because of myriad of reasons including his ties to Wall Street, weakness on banking regulations, and his past treatment of women coworkers. With a confirmation that would have been difficult at best, Summers withdrawal for consideration in September was the best decision.
Yellen is an economic "dove" who intends to continue Bernake's fed stimulus bond and securities buying program to help the economy recover until the unemployment rate lowers below the seven percent threshold. She also plans to keep interest rates low, risking inflation, because it would help increase employment. As chair she will have to slowly end the stimulus program and raise interest rates. Her nomination is boosting confidence in the falling markets because she will continue the present policies.
The President's second choice is a compromise candidate who will gather less opposition from Senate Democrats for her confirmation. Many liberal Democrats wrote Obama a letter asking him to choose Yellen over Summers early on in the race to fill the chair position.
The reaction from Senate Democrats has been overwhelmingly positive; Sen. Sherrod Brown, D-OH issued a statement, saying; "Today is a historic moment for the Federal Reserve, for women everywhere, and for all of us who care about job creation. Governor Yellen will work to prevent future bailouts, boost our housing markets, and give the Fed's mandate to maximize employment the attention it deserves." While Sen. Charles Schumer, D-N.Y. said; "she's an excellent choice and I believe she'll be confirmed by a wide margin."
The Fed Vice Chair already received an endorsement from Senate Banking Committee Chairman Tim Johnson, D-S.D. "I commend President Obama on his selection of Dr. Yellen to be the first woman to serve as Federal Reserve Chairman. She has a depth of experience that is second to none, and I have no doubt she will be an excellent Federal Reserve Chairman."
She would still face some Republican opposition, because of her support and intention to continue the stimulus plan. She received much opposition when she was nominated as Vice Chair in 2010. Sen. Bob Corker, R-TN on the Senate Banking Committee stated; "We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed."
Yellen, 67 definitely has the credentials, with an undergraduate degree from Brown University and a doctorate in economics from Yale University. She has spent most of her career as an academic teaching at the University of California, Berkeley, she has also taught at the London School of Economics, her first position was as an Assistant Professor of Economics at Harvard University.
Practically, most of her experience has been associated with the Federal Reserve, Yellen first worked at the Federal Reserve as economist in the late 1970s for two years, as President of Federal Reserve Bank of San Francisco from 2004 to 2010 when she became Vice chair of the Federal Reserve. Former President Bill Clinton appointed her to the White House Council of Economic Advisers during his second term.
Yellen's nomination itself is historic; she will be both the first woman to head the Federal Reserve Bank or any central bank worldwide for that matter, breaking another glass ceiling for professional women.
Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. Her specializations are US, Canadian & Israeli politics.