CAPITOL HILL— The United States will have its first-ever female central bank chief, after the Senate voted 56-26 to confirm Janet Yellen as chairwoman of the Federal Reserve. Yellen succeeds Ben Bernanke, who helped America weather a severe financial crisis and the deepest economic recession since the 1930s.
Yellen’s ascension from vice chairwoman to chairwoman of the Federal Reserve is historic, but her Senate backers did not trumpet her gender ahead of Monday’s vote. Rather, they stressed her qualifications and the mindset she will bring to the job.
Democratic Senator Sherrod Brown said Yellen will work to protect ordinary Americans from the excesses of a free-wheeling financial system.
“In today’s complex financial system, it is more important than ever to have strong regulators like Governor Yellen who can recognize emerging threats to economic stability, and who is not afraid to act when abuses are found that put American consumers and workers at risk,” he said.
Yellen takes the helm as the central bank is beginning to pull back from a multi-year program of extraordinary stimulus to jump-start the U.S. economy following the recession of 2008. At her confirmation hearing last year, Yellen defended the program as necessary and beneficial. Senate critics say she's a proponent of “easy money" policies that will rekindle inflation and eat away at Americans’ purchasing power.
Republican Senator Chuck Grassley had this to say before casting a “no” vote.
“We need a chairman focused on a strong dollar and low inflation. Historical evidence suggests that failing to rein in ‘easy money’ policies risks fueling an economic bubble and even hyper-inflation,” he said.
James Glassman, chief economist at banking giant JPMorgan Chase, says Yellen will bring continuity to the Federal Reserve.
“I think the way Janet Yellen handles policy at the Fed will be very similar to what Ben Bernanke did," he said. "And it is all going to be guided by how well the economy performs, how quickly the labor market improves, and how successful the Fed is in getting inflation back up to that two-percent level that everyone embraces.”
Glassman predicts Yellen will continue Bernanke’s efforts to make the Federal Reserve more transparent and less mystifying to the American public.