On Oct. 8 President Obama picked Janet Yellen to succeed Ben Bernanke as the Chairman of the Federal Reserve, in a move that was widely expected by analysts.
A former Harvard professor who has been serving as Vice Chair since 2010, Yellen is widely seen as ideologically similar to Bernanke, and is expected to continue Bernanke’s policies more or less in a similar fashion as her predecessor would have.
The most scrutinized decision Yellen will make in the near-term is whether or not to “taper” the open-ended $85 billion a month bond-buying program known as quantitative easing, or QE3. Despite persistent speculation to the contrary, Bernanke has so far declined to taper that program, citing the still-recovering American economy.
Concerning interest rates, Yellen was a key architect in keeping them low, and will most likely continue to keep them that way to prop up the banking the sector.
Yellen became the frontrunner for the position after Obama’s preferred choice, the hawkish Lawrence Summers, withdrew his name for consideration. Summers is far more conservative than Yellen, and was almost certain to taper or even outright terminate quantitative easing.
Summers was expected to face stiff resistance from the liberal wing of the Democratic Party because of his more laissez-faire attitudes.
Conversely, Yellen enjoys widespread support with liberals, and also European and Asian financial leaders who suspect she might even be more dovish than Bernanke on government stimulus.
Yellen will take over as chair of the Fed on Feb. 1. She will the first woman to head up the Fed in its history.