Janet Yellen, the current Federal Reserve Vice Chair, was tapped by President Obama to be the next Federal Reserve Chair. Ben Bernanke, the current Federal Reserve Chair, steps down from the nation’s top economic post at the end of this year. Yellen will replace him, provided that she is confirmed by the Senate.
Janet Yellen was born August 13th, 1946 (making her 67 now) in Brooklyn New York. She graduated summa cum laude from Brown with a degree in economics. She then went to Yale, where she got her Ph.D. in economics before she turned 25. From there, Yellen worked as an Assistant Professor of Economics at Harvard for five years, then went to the Federal Reserve as a staff economist for two years. At Harvard, Janet Yellen met her eventual husband, George Akerlof, a future Nobel Prize winner in Economics.
She lectured at the London School of Economics for two years before settling down in U.C. Berkeley, where she lectured through the 80s and early 90s. Starting in 1994, she took on increasingly prestigious roles as a government economist, acting as San Francisco’s Federal Reserve Bank president from 2004-2010, and Vice Chair at the Federal Reserve starting in 2010. She is now nominated to hold the top economic position in the country. She would be the first woman to hold the job.
Yellen’s Skills and Beliefs
Janet Yellen has long studied the balance between inflation and unemployment. She has argued for increased inflation in economic downturns, to bring more cash into the economy, but advised Alan Greenspan to raise interest rates during the boom years of the 2000s to rein in inflation (Greenspan did not take her advice).
Unlike many economists and investors, Janet Yellen saw the housing crisis coming (she is known as an adept forecaster). At a June 2007 policy meeting, she said, "I still feel the presence of a 600-pound gorilla in the room, and that is the housing sector….The risk for further significant deterioration in the housing market, with house prices falling and mortgage delinquencies rising further, causes me appreciable angst."
Had her warnings been heeded, the U.S. might have been spared the worst of the recession. The market crash of the late 2000s made Janet Yellen a believer in tighter market regulations. At the same time, she believes in transparent communications to the markets to provide a stable environment for investors.
Though Janet Yellen is a Democrat, it is unlikely that she will get enough opposition from Republicans in the Senate to stall her nomination. Once Larry Summers dropped out of the running, Yellen was considered the obvious and expected choice.