US Senate Confirms Janet Yellen to Lead the Fed

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Tuesday, January 07, 2014 03:35 AM / WSJ
 

The US Senate on Monday confirmed Janet Yellen to head the Federal Reserve, setting her up to take office Feb. 1 as one of the most powerful economic policy makers in the world, taking the helm of the Federal Reserve at a time when the central bank is assessing its unprecedented steps to buoy the U.S. economy.

 

Ms. Yellen, who will be the central bank’s first female chief in its 100-year history, was easily confirmed by the Democratic-controlled Senate. She is expected to be sworn into office February 01, 2014 and lead the Fed’s policy meeting in March.

 

The 67-year-old Ms. Yellen, currently the vice chairwoman of the Fed's board of governors, will become the first woman to lead the central bank in its 100-year history after the Senate voted to confirm her Monday night in a 56-26 vote. Eleven Republicans joined 45 Democrats to support her; no Democrats opposed her. Weather-related travel problems caused some lawmakers to miss the vote.
 

Expected to assume office on Feb. 1, Ms. Yellen will immediately be forced to grapple with questions over whether the economy that is on the mend can withstand further dialing back of the Fed's latest bond-buying program, which she has championed. If the Fed moves too fast, it could cool the recovery. If it moves too slowly, it could fuel asset bubbles or excessive inflation. The Fed cited improvements in growth and employment in December when it decided to trim its bond buys to $75 billion a month from $85 billion. 

Senate Democrats said Monday they expected Ms. Yellen to keep a vigilant eye on the financial system to prevent the kinds of systemic failures that sent the country into a deep recession.
 

"It is more important than ever that we have strong regulators like Governor Yellen who can recognize emerging threats to economic stability," Sen. Sherrod Brown (D., Ohio) said on the Senate floor on Monday shortly before the vote. "In confirming her, we can look forward to a new era of recovery and growth."
 

But Ms. Yellen will begin her term facing the skepticism of congressional Republicans, many of whom have expressed concerns over potential risks embedded in the Fed's bond-buying programs and pressed for more congressional oversight of the central bank's monetary-policy decisions. 

"As chair, she's likely to continue these same easy-money policies with the same, if not more, vigor than [her] predecessor," said Sen. Charles Grassley (R., Iowa), who opposed her.  

 

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