President Barack Obama is set to nominate Federal Reserve Vice Chair Janet Yellen as Ben Bernanke’s successor as chairman of the U.S. central bank, according to reports from the White House. Yellen will be the first woman to lead the powerful Federal Reserve. She would fill the role at a very influential and pivotal time for not only the banking industry, but for the U.S. economy as a whole.
A formal announcement is scheduled to take place on Wednesday at the White House. Both Yellen and Bernanke are set to meet with the president at that time. Bernanke’s term is set to conclude on Jan. 31, which will complete a successful eight-year run in which he helped get the U.S. economy out of the worst financial struggle, including a crisis and recession, since the 1930’s.
Bernanke’s leadership enabled the Federal Reserve to create extraordinary programs following the 2008 financial crisis eruption. Those programs are credited with working to save the banking system of the nation. After credit markets froze, the Federal Reserve loaned money to banks. The Federal Reserve also cut its short-term interest rates to almost zero and spent trillions on bond purchases in efforts to lower long-term interest rates.
The 67-year-old Yellen jumped out as frontrunner for the job after Lawrence Summers, former Treasury secretary who Obama seemed to support for the role, withdrew himself from consideration for the position. He stepped down last month after facing rising opposition and after many people, particularly elected officials, publicly voiced their support for Yellen.
Yellen has been a long-term close ally of Bernanke. She has served as a key architect of the efforts of the Federal Reserve, working to keep interest rates at historic lows in an effort to support the economy. She is expected to steer the policy of the Federal Reserve down the same path that Bernanke has been following.
The announcement of the appointment comes from the White House in the midst of an ongoing confrontation between the president and Republicans in Congress regarding the partial government shutdown plus the looming breach of the $16.7 trillion borrowing limit if the debt ceiling is not raised. Obama has been very critical of the GOP’s demands for changes to the Affordable Health Care Act or spending policies as a trade out for funding government operations and raising the debt ceiling.
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