President Obama just confirmed what many of us had been expecting for some time: Janet Yellen is top pick to be chairwoman of the Federal Reserve System once Ben Bernanke steps down. As you’ve probably noticed, the person at the helm of America’s central bank has a staggering about of influence over global financial markets. Janet Yellen is about to have a hand in everything from the benchmark interest rate to investor confidence to the jobs picture, so let’s take a moment to get to know her.
The first thing you need to know is that Janet Yellen is a dove, which generally means that she prefers keeping rates low to spur economic growth, even if it encourages inflation. This is important because she’s widely seen as an accommodative person. Yellen would be more resistant to stopping the Fed’s accommodative policies that Wall Street has gotten so addicted to. So many expect that the Fed would pump more under Yellen than under a hawk.
Her comments in the past have sparked the market and helped to propel it to new highs. For example, recently, she proclaimed that with inflation low and unemployment high that “it is entirely appropriate for progress in attaining maximum employment to take center stage.”
As to be expected, she has an extensive CV. From 2004 to 2010 she was the President and CEO of the San Francisco Fed. So she is keenly aware that California, Nevada and other states in her former Fed district have lingering unemployment problems. She was then promoted to Vice Chairman of the Fed in 2010 and has acted in this role ever since. She’s obviously a very capable economist who has a lot of fans, particularly among progressive and women’s groups.
The bottom line is that the Fed has is staying the course in terms of asset purchases, and with Janet Yellen taking the helm in a matter of months, tapering won’t likely be in our immediate future.