Senate confirms Yellen to lead Fed

The New York TimesJanuary 7, 2014 

WASHINGTON — The Senate confirmed Janet Yellen as the chairwoman of the Federal Reserve on Monday, marking the first time that a woman has led the country’s central bank in its 100-year history. The vote was 56-26.

As a Fed official, Yellen, 67, has been an influential proponent of the Fed’s extraordinary measures to revive the economy, even though interest rates are already close to zero. But as chairwoman, Yellen’s arduous task will be to oversee the gradual unwinding of those extraordinary measures, despite an uncomfortably high unemployment rate of 7 percent and subdued inflation.

During the confirmation process, senators from both sides of the aisle criticized the Fed for not doing enough to aid the economy and help middle-class Americans, and for trying to do too much, thus distorting the markets and risking new bubbles.

“I fear that they are already way too deep,” said Sen. Chuck Grassley, R-Iowa, on the Senate floor, before the confirmation vote. Grassley questioned how the Fed would taper its recent campaign of large-scale asset purchases “without spooking investors,” and whether it might stoke inflation.

Despite those objections, Yellen won confirmation easily. Yellen will be the first Democratic nominee to run the Fed since President Jimmy Carter named Paul Volcker as chairman in 1979.

Yellen, who will take the helm Feb. 1, steps into the position as the Fed shifts strategy.

In December, the chairman, Ben Bernanke, announced that the Fed would start to taper its purchases of Treasury and mortgage-backed debt to a pace of $75 billion a month from $85 billion a month. The decision came as new data showed stronger economic growth and a significant drop in the unemployment rate, to 7 percent in November from 7.8 percent a year before.

Yellen voted to start to ease the Fed’s asset purchases in December, alongside all but one of her colleagues on the Fed’s policymaking committee.

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