News Column

Janet Yellen Takes Post as Head of the Fed

February 3, 2014

Big News Network

janet yellen

WASHINGTON -- Respected economist Janet Yellen was sworn in as the first woman to head the Federal Reserve on Monday, taking over the top job at the central bank from Ben Bernanke. Her main task will be managing the winding down of the bank's bond-buying stimulus programme without spurring more turmoil.

Yellen, 67, had been Bernanke's deputy for three years.

Nominated to the job last October by President Barack Obama, she will serve a four-year term concurrent to her ongoing 14 year term on the Fed's board of governors

She has worked closely with Bernanke during her three-plus years as Fed vice-chair, and is not expected to depart from his policies aimed at helping lower still-high unemployment levels as long as inflation remains tamed.

Yellen has served in a number of positions in the Fed, including head of its San Francisco branch, and also has held academic positions at Harvard University and University of California at Berkeley. She is married to economics Nobel prize winner George Akerlof.

She swore the oath to Governor Daniel K Tarullo in the Fed's Board Room earlier, beginning a four-year term as chair of the board of governors of the Federal Reserve System.

The phased reduction, or tapering, of its $85bn-a-month Quantitative Easing (QE) programme has already sparked unrest in emerging financial markets.

QE helped keep US interest rates low and has resulted in a large outflow of cash from the US into other currencies, as investors looked for better returns abroad.

The tapering has reversed this trend, with a number of foreign currencies falling in value as a consequence.

Yellen is professor emeritus at the University of California at Berkeley, where she has been a faculty member since 1980, specialising in business and economics.

She made no remarks after her swearing in.

Yellen will immediately have her work cut out. On 11 February, she will appear before a congressional committee to answer questions on the economy, her policy views and regulation.

She will then have to begin preparing for her first meeting as chair of the federal open markets committee (FOMC), which sets interest rates and monetary policy. That meeting, on 19-20 March, will be followed by her first press conference as Fed chair.

The next big test of the health of the US economy comes on Friday with the release of the nonfarm payroll figures for January. The tally of the number of new jobs created in December was a disappointing 74,000, far below the 200,000-plus the US had added in recent months.

Bernanke is returning to academia after eight years as Fed chairman, and is joining the Brookings Institution, a Washington-based think tank, as a resident fellow.

"He will be a major contributor to the task of understanding the momentous events of the past eight years and crafting imaginative, pragmatic strategies to ensure the stability of the national and global economy," said Brookings president Strobe Talbott.

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