US Senate confirms Janet Yellen to lead Federal Reserve
- 6 January 2014
- From the section Business
The US Senate has confirmed Janet Yellen as the next head of the US Federal Reserve.
Fifty-six senators voted in favour of Ms Yellen with 26 opposed - many members of the chamber were unable to attend the vote because of bad weather.
It was the last procedural hurdle for the 67-year-old before taking over from outgoing chair Ben Bernanke on 1 February.
She is the first woman to lead the central bank in its 100-year history.
President Barack Obama welcomed the vote, saying in a statement: "The American people will have a fierce champion who understands that the ultimate goal of economic and financial policymaking is to improve the lives, jobs and standard of living of American workers and their families."
Originally from Brooklyn, New York, Ms Yellen served as chair of former US President Bill Clinton's Council of Economic Advisers and was an economics professor at the University of California, Berkeley.
During the Senate session to confirm her as the head of the central bank, many senators praised her long-term focus on unemployment.
Ms Yellen is the first Fed chair nominated by a Democratic president since Paul Volcker left the top spot in 1987.
Tough road ahead
She will face a difficult road ahead once Mr Bernanke steps down after eight years in office.
Although most analysts expect Ms Yellen to continue Mr Bernanke's efforts to boost the US economy by keeping short term interest rates low, she will eventually face unchartered territory once the central bank begins to ease back on its extraordinary measures.
Ms Yellen was a strong supporter of the Fed's current stimulus efforts - a $75bn a month bond buying programme known as quantitative easing. By buying bonds, particularly mortgage bonds, the Fed has tried to keep long term interest rates low to spur housing activity and encourage investors to spend, rather than save, their money.
In doing so, the Fed has amassed close to $4 trillion in assets since it first initiated its stimulus efforts in the wake of the 2008-2009 financial collapse - a fact that some senators criticised during Monday's confirmation hearings.
Although the central bank announced plans to cut its purchases from $85bn a month to $75bn a month in December, Ms Yellen faces the difficult task of assessing when and how to ease stimulus efforts.
The Fed has admitted recently that its projections for the US economy over the past few years have been overly optimistic, forcing it to continue its extraordinary measures for longer than initially intended.