The U.S. Senate has confirmed Janet Yellen as the new head of the U.S. Federal Reserve, making her the first woman to head the central bank for the world's largest economy. She replaces Ben Bernanke who is leaving the post at the end of the month.
Who is Janet Yellen?
Vice Chair of the Board of Governors of the Federal Reserve System since 2010
Served as President and CEO of the 12th District Federal Reserve Bank, San Francisco
Professor Emeritus at the University of California at Berkeley
Member of Council on Foreign Relations and American Academy of Arts and Sciences
Received Ph.D. in Economics from Yale University in 1971
Economists are predicting that economics professor and Federal Reserve vice chair Janet Yellen will continue many of Ben Bernanke's efforts to boost the economy. Both have called for a gradual end of the central bank’s multibillion-dollar program to keep interest rates low and stimulate the economy.
President Obama says Yellen is tough and effective.
“She sounded the alarm early about the housing bubble, about excesses in the financial sector and about the risks of a major recession. She doesn’t have a crystal ball, but what she does have is a keen understanding of how markets and the economy work - not just in theory but in the real world," said President Obama.
Yellen has written extensively about the causes and impact of unemployment, and some analysts say she may put even more emphasis on creating jobs.
"Too many Americans still cannot find a job and worry how they'll pay their bills and provide for their families," said Yellen.
Unemployment hit 10 percent during the recession, and has now fallen to 7 percent, but that number is still above its historic average.
Economists say Yellen will likely continue Bernanke's policies of holding short-term interest rates close to zero by using the Fed's massive program of buying securities.
The U.S. central bank has been buying $85 billion in securities every month, to pump more money into the economy and make it easier for businesses and individuals to borrow. But economists say that stimulus must end eventually, to avoid sparking inflation that could damage the economy.
“I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy," said Yellen.
Yellen once headed the Federal Reserve Bank of San Francisco. Former president Bill Clinton named her head of his Council of Economic Advisers in 1997. The 67-year-old economist is professor emeritus of the University of California at Berkeley, where she has been on the faculty for decades.