Janet Yellen’s nomination to succeed Ben Bernanke as Federal Reserve chairman drew a swift response from lawmakers and industry participants last week. Democrats and some important trade associations quickly backed the nomination and called for Senate confirmation. However, some U.S. Senate Republicans signaled they do not intend to give the nominee a free pass.
President Barack Obama said Yellen, currently the Fed’s vice chairman and a former Fed bank president, is a proven leader and consensus builder who is “exceptionally well-qualified” to lead the 100-year-old central bank when Bernanke’s term ends in January.
“Janet is committed to both sides of the Fed’s dual mandate, and she understands the necessity of a stable financial system where we move ahead with the reforms that we’ve begun,” Obama said during an Oct. 9 White House press conference. “At the same time, she’s committed to increasing employment, and she understands the human costs when Americans can’t find a job.”
Yellen said too many Americans still can’t find work, adding that “the Federal Reserve can help if it does its job effectively.”
“The Fed has powerful tools to influence the economy and the financial system, but I believe its greatest strength rests in its capacity to approach important decisions with expertise and objectivity, to vigorously debate diverse views and then to unite behind its response,” she said.
Democrats in the House and Senate rallied behind Yellen, who would also be the Fed’s first female chairman if confirmed. Rep. Maxine Waters, D-Calif., ranking member of the influential House Financial Services Committee, said the nomination is “both historic and important for our nation’s economy.” Waters has lobbied for Yellen’s nomination since July.
“Yellen’s experience as a former chair of the Council of Economic Advisers, regional Fed bank president and vice-chair of the Federal Reserve makes her one of the most qualified people ever to be nominated,” Waters added.
Key industry groups also supported the nomination. Bill Loving, chairman of the Independent Community Bankers of America, said Yellen’s position as a former president of the Federal Reserve Bank in San Francisco gives her “practical, on the ground regulatory and administrative experience.”
“Yellen understands community banks from the ground level and has an appreciation for the unique business model of community banks and the valuable role they play in the growth and economic vitality of the communities they serve,” Loving said. “She also brings unimpeachable credentials as one of this nation’s most outstanding economists.”
The Securities Industry and Financial Markets Association said Yellen is a “proven leader whose breadth of experience and expertise make her highly qualified” to lead the Fed.
Some Senate Republicans were measured in their response, while others expressed outright opposition to the nomination. Sen. Mike Crapo, R-Idaho, ranking member of the Banking Committee, promised that Yellen’s nomination will be carefully reviewed.
“The next Fed chair faces a unique set of challenges, including winding down unconventional monetary policy, implementing a long list of unfinished rules under Dodd-Frank without over-regulating the community banking sector and effectively communicating future policies to the markets and the public,” Crapo said. “I continue to strongly disagree with the Fed’s use of quantitative easing, and am eager to learn Ms. Yellen’s vision for the direction of the Federal Reserve as we go through the nomination process.”
Banking Committee member Sen. Bob Corker, R-Tenn., signaled he would oppose confirmation.
“I voted against vice chairman Yellen’s original nomination to the Fed in 2010 because of her dovish views on monetary policy. We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed,” Corker said.
Sen. John Cornyn, R-Texas, the Senate’s number two Republican, left little doubt regarding how he will vote.
“Ms. Yellen subscribes to the liberal school of thought that the best way to handle our nation’s fiscal challenges is to throw more money at them,” Cornyn said. “This stimulus obsession is the reason the nation finds itself in the fiscal calamity it does today, and the last thing we need is a leader at the helm of the Federal Reserve who is intent on more quantitative easing that harms our economy and further burdens hard-working Americans.”