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Obama names Bernanke's deputy Yellen as next Fed chief

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(Globalpost/GlobalPost)

U.S. President Barack Obama on Wednesday named Janet Yellen, top deputy of Federal Reserve Chairman Ben Bernanke, as the next chief of the country's central bank.

Yellen would be the first woman to head the U.S. central bank in its 100 year history if confirmed by the Senate. She is regarded by the market as likely to basically follow the monetary policy course set by Bernanke.

Yellen, an economist-turned central banker, will be tasked in her four-year term with phasing out the current unusual accommodative easing and returning the country to the monetary policy it pursued before the financial crisis hit in 2008.

"Janet is committed to both sides of the Fed's dual mandate and she understands the necessity of a stable financial system," Obama told a press conference with Yellen and Bernanke, referring to the Fed's key tasks of achieving maximum employment and price stability.

Yellen pledged to work hard to improve the job market, saying, "Too many Americans still can't find a job and worry how they'll pay their bills and provide for their families. The Federal Reserve can help if it does its job effectively."

Many Senate Democrats favor Yellen as successor to Bernanke, who is expected to step down after his second term expires in January.

The Fed has taken accommodative measures featuring ultralow interest rates and open-ended quantitative easing through asset purchases to prop up the crisis-hit U.S. economy.

Obama in August described Yellen, 67, as one of the "highly qualified candidates" for next Fed chief.

"Her greatest challenge is likely to be when and how to unwind all of the stimulus that has been put in place," Adrian Cronje, chief investment officer of the Atlanta-based investment firm Balentine, told Kyodo News in a phone interview.

"How she handles that through communication is going to probably be the most interesting innovation in my view of the Federal Reserve under her leadership," Cronje said.

Yellen, who hails from New York, headed the White House's Council of Economic Advisers from 1997 to 1999 under President Bill Clinton after serving as a member of the Fed's board of governors.

She became president of the Federal Reserve Bank of San Francisco in 2004 and took her current post in 2010.

U.S. media had said Obama intended to name Lawrence Summers, former Treasury secretary, as the next Fed chief. But Summers withdrew from the race last month after facing resistance by some key Congress members.

Bernanke, 59, assumed the post of the Fed chief in February 2006 with the nomination of President George W. Bush. Obama reappointed him.

Bernanke had lowered the interest rate to almost zero and introduced three quantitative easing programs in a bid to save the U.S. economy from the financial crisis of 2008.

He raised the transparency of the decision-making process in the central bank by starting to hold regular press conferences in 2011.

==Kyodo

http://www.globalpost.com/dispatch/news/kyodo-news-international/131009/obama-names-bernankes-deputy-yellen-next-fed-chief