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US Senate Voting on Yellen as Central Bank Chief

FILE - Janet Yellen, of California, President Barack Obama's nominee to become Federal Reserve Board chair, testifies on Capitol Hill in Washington, Thursday, Nov. 14, 2013.
FILE - Janet Yellen, of California, President Barack Obama's nominee to become Federal Reserve Board chair, testifies on Capitol Hill in Washington, Thursday, Nov. 14, 2013.
VOA News
The U.S. Senate appears set to confirm Janet Yellen as the new chair of the country's central bank, making her one of the most powerful figures in world economic circles.

The Senate is scheduled to vote late Monday on her nomination as chair of the Federal Reserve, and analysts believe she has enough votes to win confirmation. She would become the first woman to head the 100-year-old agency and replace Ben Bernanke when his eight-year tenure expires at the end of January.

The head of the U.S. Federal Reserve has often influenced world economic decisions. Economists are predicting that the 67-year-old Yellen, the Fed's current vice chair, will continue many of Bernanke's policies. Both Yellen and Bernanke have called for a gradual end to the central bank's direct support of the U.S. economy and continued low interest rates.

The chief economist at the country's biggest bank, James Glassman of JPMorgan Chase, told VOA that Federal Reserve policies will be shaped by the performance of the world's largest economy as it recovers from the steep recession of 2008 and 2009.

"It's all going to be guided by how well the economy performs, how quickly the labor market improves, how successful the Fed is in getting inflation back up to the two percent level that they, every one of them embraces as the right goal to have," said Glassman.

The Federal Reserve has been buying billions of dollars of securities to pump more money into the economy to boost job growth and keep long-term interest rates low. However, the central bank has begun to trim the purchases, cutting them from the $85 billion a month it had made for more than a year to $75 billion this month.

Glassman sees that direct stimulus of the U.S. economy coming to an end.

"In the markets, we anticipate that this will wind down over the course of the year, so that by fall, they'll be done with it," said Glassman.

When President Barack Obama nominated Yellen three months ago, she noted that many American workers suffered during the downturn; many were laid off from long-held jobs as the economy weakened.

"Too many Americans still cannot find a job and worry how they will pay their bills and provide for their families," said Yellen during her remarks.

Since then, the U.S. economy has advanced. The unemployment rate has dipped to a five-year low of 7 percent, a figure that is still a percentage point or more above the country's historical standards, and employers have been adding about 200,000 jobs per month.

The Federal Reserve is predicting that the American economy will steadily grow in 2014, an assessment Glassman agrees with. He predicts growth of more than three percent this year, compared to about two percent in recent years, and an even faster advance in 2015.

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