President Barack Obama has nominated Janet Yellen to head the U.S. Federal Reserve. If confirmed by the Senate, she would be the first woman to lead the central bank for the world's largest economy. Yellen is currently the second-in-command at the Fed, and many economists say she is likely to continue its efforts to boost economic growth and lower unemployment by cutting short and long-term interest rates.
Obama came into office during the worst recession in decades, and opinion polls show the economy remains a top issue for voters.
Unemployment has improved recently, but slowly, giving 67-year-old former Berkeley professor and long-time Fed official Janet Yellen a tough job. Obama says he has confidence in her.
"One of the nation's foremost economists and policymakers, current vice chairman, Janet Yellen," said President Obama.
Yellen says she understands the plight of the nation's millions of unemployed people.
"While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the American people, and too many Americans still cannot find a job, and worry how they will pay their bills and provide for their families," said Yellen.
Yellen would replace Ben Bernanke, whose second term as head of the U.S. central bank ends in January. Obama praised his skill, creativity and courage in using unprecedented tactics to cope with severe economic problems.
Under Bernanke's leadership, the Fed cut short-term interest rates to near zero, and has been trying to cut long-term rates with an $85 billion-a-month program of buying certain securities.
The Fed will have to decide how soon and how quickly to end this stimulus effort. Economists say if the support is withdrawn too quickly, the economy could lapse back into recession. If stimulus efforts go on for too long, however, they could spark inflation that could harm the economy.
Economist Joseph Gagnon of the Peterson Institute for International Economics, who previously worked at the Fed, says Yellen probably will continue Bernanke's policies.
"I think Janet Yellen is fairly close to Ben Bernanke in terms of how she thinks about the economy," said Gagnon.
Gagnon says Yellen is also likely to continue Bernanke's collegial, academic style of dealing with the Fed governors, seeking consensus on economic policy.
While Yellen brings continuity to the Fed, she is also the first woman to hold the job. Marcy Syms, former chair and CEO of SYMS Corp who served on a board of small business advisors to the Federal Reserve of New York, says Yellen could inspire a generation of little girls.
"It is a really big deal for the future of women going into science and math, something that this country desperately needs," said Syms.
Some analysts say Yellen is likely to be confirmed by the Senate, with votes from President Obama's Democratic Party allies and some moderate Republicans.
Obama's other candidate for the job, former Treasury secretary and presidential adviser Larry Summers, withdrew his name from consideration in the face of opposition from Senate Democrats.