US president Barack Obama will nominate Janet Yellen, the current number two at the US Federal Reserve today.
Janet Yellen is regarded as a pro-growth central banker who markets expect will be slow to wind down the current economic stimulus programmes put in place by current Fed chairman, Ben Bernanke. Mr. Bernanke’s term expires on January 31st next.
Ms. Yellen will require US Senate confirmation, which is widely expected.
Concerns that the Fed might start to taper its stimulus program have roiled financial markets since May and the central bank shocked investors in September by maintaining its cash injections of $85 billion (€63 billion) a month in full.
“At a time the US political system is creating enormous turmoil and uncertainty with the stalemate on the budget, the appointment of Ms. Yellen brings an enormous amount of calm and certainty” said Mr. Frank Conway, Founder of the Irish Financial Review.
Ms Yellen is a graduate of Brown University in Providence and a former professor from the University of California at Berkeley. She is known to be a careful and deliberate thinker who has been mostly right in her assessments over the tumultuous past six years of crisis, recession and grinding recovery. She has been a strong intellectual force within the Fed, a tough taskmaster for staff and single-minded in her desire to push down joblessness. She has been less inclined to wring her hands over the risks that the Fed’s easy money policies could create new bubbles or stoke inflation.
“Her Republican backing is much softer. Many Republicans worry Fed policy of holding overnight interest rates at zero and buying bonds aggressively to drive other borrowing costs lower could lead to asset bubbles and an unwanted pickup in inflation.” said Mr. Conway.
Ms. Yellen is expected to garner enough support to secure the 60 votes needed to overcome any procedural hurdles in the 100-seat Senate. Democrats control the chamber 54-46
“While her economic approach is the central focus, Ms. Yellen’s appointment to the top job at the Fed would give her the distinction of the first female to occupy the role in the institution’s 100-year-old history” said. Mr. Conway