Senate confirms Yellen to lead the Fed
WASHINGTON - The Senate confirmed Janet Yellen to head the Federal Reserve on Monday, making her the first woman to head the world's most powerful central bank and arguably the most important female banker in history.
The Senate voted, 56-26, to confirm Yellen, who has been the vice chair of the Fed since 2010. Yellen, 67, will take the helm after Chairman Ben Bernanke's second four-year term ends Jan. 31.
Though never in serious jeopardy, her nomination proved more controversial than anyone had anticipated. Bernanke was confirmed on a voice vote in 2006, with just one senator, Kentucky Republican Jim Bunning, opposed. Bernanke was reconfirmed in 2010, but in a sign of how the Fed's controversial stimulus efforts polarized the Congress, his second term was put to a formal vote, which he cleared by 70-30.
Yellen was a co-architect of the Fed's controversial bond-buying program, designed to help boost investment and economic activity. It has come at a cost of $85 billion a month since December 2012, and it will fall to her to unwind that effort at a pace that doesn't disrupt the economy or spike inflation.
"No one can deny that the risks are real and the results could be devastating," Sen. Charles Grassley (R., Iowa) said Monday.
It also will fall to Yellen to begin raising the cost of borrowing eventually, after record-low costs for a record period of time. The Fed's benchmark federal funds rate, which influences the cost of borrowing for consumers and businesses alike, has been near zero since December 2008.
"I think she is going to be forced to be the Fed chair that tightens policy," said Dean Croushore, an economics professor at the University of Richmond in Virginia who is the co-author of a textbook with Bernanke. "She'll have no choice but to do that."
Economists had long expected Yellen to take over from Bernanke, after they devised unconventional policies together to spark the economy. She had long been viewed as one of the nation's top economists, having run the Federal Reserve Bank of San Francisco, and she was a prominent academic at the University of California at Berkeley.
Over the summer, however, the Obama administration put out feelers to gauge the chances of confirmation for former Treasury Secretary Lawrence Summers. Summers enjoyed a close relationship with President Obama, despite being chased out of the presidency of Harvard University in 2006 for suggesting there were innate reasons few women pursue careers in math and science.
"She deserves the job because she deserves the job," Terry O'Neill, the president of the National Organization for Women, said in an interview Monday. "But she has broken through the glass ceiling in a very important way."