Mon January 6, 2014
Senate Confirms Janet Yellen As Federal Reserve Chair
Originally published on Mon January 6, 2014 6:13 pm
The Senate has voted to approve the nomination of Janet Yellen as the next leader of the U.S. Federal Reserve. With Monday's vote, Yellen, 67, will become the first woman to serve as America's banking chief, heading an institution that was established in 1913.
Update at 6:31 p.m. ET: Some Senators Left Out
The final tally confirming Yellen's nomination was 56-26. She needed a simple 51-vote majority to be confirmed. The vote was held despite flight delays due to winter weather and other travel woes that kept more than a dozen legislators from being in the chamber.
Republicans who voted against Yellen's confirmation included Sens. Ted Cruz and John Cornyn of Texas, along with Sens. Jeff Sessions of Alabama and Marco Rubio of Florida.
Our original post continues:
The vote had the air of a formality, lacking the heated debates that have preceded recent Senate decisions. The initial call for senators' votes came in a nearly empty chamber; senators filtered in and out, chatting as the vote proceeded.
Yellen will succeed Ben Bernanke, whose second term as chairman of the Board of Governors of the Federal Reserve System ends on Jan. 31. She is widely expected to continue many of the policies and priorities of her predecessor, especially his efforts to rein in unemployment rates.
She is slated to lead her first Federal Reserve meetings in March.
When she's sworn in, Yellen will become "the first Fed chair appointed by a Democratic president since Paul Volcker left the post in 1987," the AP tells us. The chairmanship's term runs four years, meaning she'll be up for replacement or renewal in 2018.
The new chief banker's term will begin as many analysts are watching the Federal Reserve for signs of how it will handle the "tapering" of massive infusions of money it has provided in an effort to stimulate the U.S. economy. The policy of buying $85 billion in Treasury and mortgage bonds each month has helped keep interest rates at very low levels.
The final vote approving Yellen's nomination comes as her one-time rival for the post, former White House adviser Lawrence Summers, airs his thoughts on America's economy in an op-ed piece for The Washington Post. In it, Summers warns that "a growth strategy that relies on interest rates significantly below growth rates for long periods virtually ensures the emergence of substantial financial bubbles and dangerous buildups in leverage."
Summers, who had been named in some reports as President Obama's first choice to replace Bernanke, withdrew his name from consideration for the Fed's top job in September, citing a confirmation process that would be "acrimonious" and distracting.
Today's vote comes less than two months after Yellen breezed through a question-and-answer session on U.S. economic policy with the Senate Banking Committee. On Nov. 21, the panel voted 14-8 to approve her nomination, with Yellen gaining the support of three Republicans on the committee.
In November's meeting with the Senate Banking Committee, the Fed's policies prompted an exchange with Sen. Bob Corker, R-Tenn., who told Yellen that many people believe the stimulus effort has helped wealthy Americans the most.
"Low interest rates harm savers, it's absolutely true," Yellen told Corker, noting that people who live on a fixed income also often rely on safe and steady rates of return tied to interest rates.
Yellen added, "We can't have normal rates unless the economy is normal. At the moment, we have a lot of saving, and not very much investment."
Corker later voted in support of Yellen's nomination.
Yellen currently serves as the vice chair of the Federal Reserve Board, a post she has held since 2010. Her earlier work includes a stint as the head of the Federal Reserve Bank of San Francisco. She also chaired President Clinton's White House Council of Economic Advisers.