Yellen Set To Move Closer To Confirmation As Next Fed Chair

by
Reuters
Janet Yellen will take an important step on Thursday toward becoming the first woman to lead the U.S. Federal Reserve, with the Senate Banking Committee expected to back the nomination and clear her path to take the central bank's helm.

Janet Yellen will take an important step on Thursday toward becoming the first woman to lead the U.S. Federal Reserve, with the Senate Banking Committee expected to back the nomination and clear her path to take the central bank's helm.

President Barack Obama nominated the Fed's current vice chair to replace Ben Bernanke when his terms ends on Jan. 31 and she had been expected to win confirmation with relative ease.

The banking panel, where Obama's Democrats occupy 12 of the 22 seats, will vote at 10.00 a.m. (1500 GMT) on whether to pass her confirmation forward for consideration by the full Senate.

Yellen, viewed as a monetary policy dove who puts more weight on driving down high unemployment than the risk this will ignite future inflation, will preside over a central bank that has taken dramatic steps to spur U.S. growth and hiring.

It has held interest rates near zero since late 2008 and quadrupled the size of its balance sheet to $3.9 trillion through three massive asset purchase campaigns aimed at lowering the cost of long-term borrowing.

This has made the Fed a target for Republican lawmakers worried that these ultra-easy policies have enabled big spending by the Obama administration.

Little of this concern was forcefully raised by critics during Yellen's hearing before the banking panel last week, which she sailed through. Her confirmation is expected to be equally smooth, with a vote likely in December.

Democrats control 55 of the 100 votes in the chamber, which means she needs to only secure the backing from five Republicans to overcome Senate procedural hurdles, and looks well on the way to reaching that threshold.

Senator Bob Corker of Tennessee declared on Wednesday that he would support her confirmation and three other Republicans have also publicly said they were inclined to vote in her favor.

"In the end, I do believe she has the qualifications necessary to be the Fed chairman and plan to support her nomination," said Corker, who voted against Yellen as Fed vice chair in 2010.

In addition to Corker, Senator Susan Collins of Maine has told reporters she is inclined to support the nomination. Aides for Senator Tom Coburn of Oklahoma and Senator Lindsey Graham of South Carolina say they are likewise minded.

Also, an aide for Senator Orrin Hatch of Utah said he was always predisposed to show deference on presidential nominations, although he has not yet declared how he would vote this time.

There are some remaining obstacles. Republican Kentucky Senator Rand Paul plans to put a hold on her nomination in order to get a vote on a bill he has sponsored to expose the Fed to more congressional scrutiny. But he told Reuters TV that he did not expect to be able to block her successful confirmation.