The U.S. Senate confirmed Janet Yellen to succeed Ben Bernanke as the next chairman of the Federal Reserve on Monday night, signaling a continuation of currrent policies.
The Senate voted 56-26 to approve the nomination of the current vice chairman, which means Yellen, 67, will replace the outgoing Bernanke when his term expires at the end of January. In urging the Senate to confirm Yellen, Sen. Sherrod Brown (D-Ohio) said Yellen was qualified to take the helm of the Fed and make history as the first woman to do so. “We can look forward to a new era of recovery and growth,” he said on the floor Monday.
In a recent WealthManagement.com survey, one advisor said that Yellen’s stance on monetary policy is cause for a bullish outlook, but another also expressed wariness that the easy money policies may continue to artificially inflate stocks.
“I'm bullish on the equity market for two reasons: 1. Janet 2. Yellen,” says Brian Betz of Percension Wealth Advisors. Peter Pottle of Pottle Financial services said “It is sad to say, but true, that Janet Yellen now holds the short term future of stocks in her hands. She has already committed to being one of the ‘good hands’ people. Let the good times roll!”
President Barack Obama nominated Janet Yellen to serve as the next Fed chair in October, following months of speculation. Calling Yellen a "proven leader," President Obama noted the current vice chairwoman is tough, "and not just because she's from Brooklyn," he joked.
With her confirmation by the Senate on Monday, the Brooklyn native is the first female chair in the 100-year history of the Federal Reserve and the 15th chairman overall.
Despite smooth sailing during her confirmation process, Yellen faces major challenges ahead, including finding an exit to the Fed’s current quantitative easing program. In a move that may ease that tension, the Fed reduced its monthly bond buys by $10 billion to $75 billion last month.
Outgoing chair Bernanke supported the move, but the Fed emphasized that it could adjust future purchases back up if need be, saying that while the economy and job market have improved, unemployment is still elevated.
Yellen’s appointment could just be the beginning of a wave of changes. At least two other seats on the Fed board of directors are open, with sources telling the Washington Post that the White House could nominate Stanley Fischer, former head of the Bank of Israel, as vice chairman.