Obama to name Yellen as next Fed chair on Wednesday -White House

WASHINGTON Wed Oct 9, 2013 5:01am IST

U.S. Federal Reserve Vice Chair Janet Yellen speaks at the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) in Washington February 11, 2013. REUTERS/Kevin Lamarque/Files

U.S. Federal Reserve Vice Chair Janet Yellen speaks at the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) in Washington February 11, 2013.

Credit: Reuters/Kevin Lamarque/Files

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WASHINGTON (Reuters) - President Barack Obama will announce his intent to nominate Federal Reserve Vice Chairwoman Janet Yellen to be the next head of the U.S. central bank on Wednesday, a White House official said on Tuesday.

If confirmed by the U.S. Senate, Yellen would replace Ben Bernanke, whose current term as head of the Fed ends in January. Obama is due to make the announcement at the White House at 3 p.m. (1900 GMT). Bernanke is also scheduled to attend.

Yellen would be the first woman to lead the institution in its 100-year history.

Yellen has been a forceful advocate of aggressive action to drive down unemployment and would provide continuity with the policies the Fed has established under Chairman Ben Bernanke.

The former professor has a long history in the top ranks of economic policymaking, including her service over the past three years as the Fed's No. 2 official. If confirmed, she would succeed Bernanke when his second four-year term expires on January 31.

Yellen, 67, would have to oversee the tricky process of reversing the extraordinary stimulus the U.S. central bank put in place to shore up the world's largest economy, which eclipses Japan and China put together.

If she wins the Senate's backing, as expected, she would join the Fed's honor roll along with such household names as Paul Volcker and Alan Greenspan, predecessors as head of an institution that can influence the course of the world economy.

Obama turned to Yellen after his former economic adviser Lawrence Summers withdrew from consideration amid fierce opposition from within Obama's own Democratic Party, which raised questions about his chances of being confirmed in Congress.

In contrast, Yellen has enjoyed strong support from Democrats. In an unusual move, 20 Senate Democrats signed a letter pressing Obama to turn to the former professor from the University of California at Berkeley.

Her backing on the Republican side of the aisle is much softer. Many Republicans worry the Fed's policy of holding overnight interest rates at zero and the massive bond purchases it has pursued to drive other borrowing costs lower threaten to create asset bubbles and spark an unwanted pickup in inflation.

Still, Yellen is expected to garner enough support to secure the 60 votes needed to overcome any procedural hurdles in the 100-seat Senate. Democrats control the chamber 54-46.

A respected economist whose research has taken her deep into theories of monetary policy, Yellen has earned a reputation as one of the Fed officials most worried about unemployment and least worried about inflation. (Editing by Tim Dobbyn)

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