Yellen confirmed as chair of Federal Reserve
The Senate confirmed Janet Yellen GRD ’71 as the chairwoman of the Federal Reserve this evening. The first woman to lead America’s central bank, Yellen is also the first Democrat appointment to run the Fed Reserve since President Jimmy Carter named Paul Volcker to the position in 1979.
A member of the Yale Corporation from 2000 to 2006, Yellen was previously the Vice-Chairwoman of the Fed Reserve where she advocated for the central bank to play an active role in stimulating the economy, even though interest rates are near zero.
During the confirmation process, Yellen and the Fed Reserve drew criticism from Democrats for allegedly not doing enough to help middle-class Americans. Meanwhile, Republicans questioned whether the Fed Reserve was only creating new bubbles with its activist policies or stoking inflation.
But despite these objections, Yellen won confirmation easily by a vote of 56 to 26 on the Senate’s first day back in session after the winter holidays.
Yellen will take the helms of the Fed Reserve at a crucial juncture in the bank’s and nation’s history. Over the past five years, the Fed Reserve has injected trillions of dollars into the economy through bond purchases that have lowered the borrowing costs for businesses and consumers in an effort to boost an anemic recovery. But Yellen’s predecessor and the current Fed Chairman Ben Bernanke announced in December that the bank is starting to “taper” or scale back its support — economists and analysts say that any miscalculation on Yellen’s part could spook Wall Street
“There is no question there could be unintended consequences,” New York Fed President William Dudley said at a conference in Philadelphia on Sunday describing the challenges Yellen and other central bankers across the globe will face in coming years.
While 2013 was a strong year for the stock market, Yellen inherits a national economy that remains sluggish. Unemployment remains high and annual growth has yet to reach pre-recession levels.
Yellen’s career has included lengthy sojourns in both public service and academia. After receiving her undergraduate degree summa cum laude in economics at Brown University in 1967, Yellen began her career as an assistant professor at Harvard after receiving her Ph.D in economics at Yale in 1971 under the tutelage of Nobel Laureate James Tobin. After a brief stint working as an economist with the Fed Reserve, Yellen then moved to the University of California, Berkeley in 1980 where she is now the Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics. She was also the chair of the Economic Council of Advisers from 1997 to 1999 under President Bill Clinton LAW ’73.
She is slated to take office Feb. 1.