US President Barack Obama has nominated Federal Reserve Vice Chair Janet Yellen to be the next Federal Reserve chairperson. She would replace Chairman Ben Bernanke, whose term of office expires next January.
At least one thing is certain in DC: Fed Vice Chair Janet Yellen is Obama’s choice to be the next Federal Reserve Chairman. And she might be able to teach lawmakers a thing or two.
Obama said, "Janet also knows how to build consensus. She listens to competing views and brings people together around a common goal."
Obama’s praise for Yellen’s ability to build consensus is ironic given the government shutdown and the threat of defaulting on the nation’s debts.
At the announcement- Yellen was all smiles- and optimistic:
Yellen said, "We have made progress. The economy is stronger and the financial system sounder."
While there has been some pushback among Senate Republicans- she is widely expected to be confirmed. Laura Gonzalez, Economics and Finance Professor at Fordham University:
"Ms. Yellen is liked, is well liked by the markets because she is expected to keep the Fed in a steady course without surprises. She is also known to be the best forecaster in the Fed. Several analysts have been following her forecast over the years, and she is by far the best predictor of future trends in growth and in labor."
But Yellen will lead a very challenged Fed. Newly released minutes of the last policy meeting show lots of disagreements about tapering the $85 billion monthly bond buying program.
And there were worries about a number of potential economic shocks- like the government shutdown and debt ceiling crisis.
The Fed is now hampered by a lack of critical economic data because of the shutdown, making forecasting tricky at best.
IHS Chief Economist Nariman Behravesh:
"The data that we look at, the- we all look at the Fed looks at to make these decisions is not going to be available for a while or if it is, it might be slightly distorted by the government shutdown so it will complicate their job and it adds to the uncertainty if you will."
If confirmed Janet Yellen will be the first female Fed Chairman in its 100 year history.