Janet Yellen's bid to lead the Federal Reserve won a significant boost on Wednesday when one of her biggest critics in the U.S. Senate said he had decided to support her nomination.
Republican Senator Bob Corker from Tennessee said in a statement that he would set aside his reservations about Yellen because he believes she will bring more transparency to the U.S. central bank and has pledged to reduce Fed bond purchases as soon as economic data support such a move.
“In the end, I do believe she has the qualifications necessary to be the Fed chairman and plan to support her nomination,” said Corker, who voted against Yellen's nomination as Fed vice chair in 2010.
Corker is a member of the Senate Banking Committee, which will vote on Thursday on whether to send Yellen's nomination to the full Senate. Although she is expected to win confirmation relatively easily, Corker's support could help persuade a handful of other Senate Republicans to drop their opposition.
Yellen's nomination needs 60 votes to overcome procedural hurdles in the Senate, where Democrats control 55 votes.
Corker said he had changed his mind as a result of discussions with Yellen.
“I would prefer to see someone who held a more modest view regarding the limits of monetary policy on our economy, and I have been clear about that,” said Corker, a longtime critic of the Fed's bond-buying program aimed at holding down borrowing costs.
“During our discussions, she made a commitment to moderate purchases as soon as she believes the data supports that action and shows that the current status cannot continue,” he said.
He added that he was concerned about Yellen's lack of experience in regulation of large, systemically important financial institutions and said he hopes she will “work hard to overcome this deficit and not just rely on others on the Fed board for this expertise.”
Corker also said he hopes Yellen will develop a cadre of market experts and practitioners who can help advise her in the event of another financial crisis.
“As a result of these conversations, I do believe she will bring a more transparent approach to Fed decisions and guidance,” said Corker. “She will approach decisions with a more rules-based methodology. She understands that monetary policy is a blunt object, that distortions are occurring, and that the affluent disproportionately benefit from easy money policies.”