“You would eat a diet that is richer in discussions of economics and policy issues than many people would find appetizing.”
Her nomination was not a surprise after the presumed favorite, former Treasury secretary Lawrence Summers, pulled out of the running after several top Democratic senators voiced vehement opposition.
Though criticized by conservatives as a Fed “dove” — one of a camp allegedly too determined to stimulate growth and not adequately worried about the threat of inflation — Yellen is certain to get a better reception in the Senate than Summers would have received.
Senator Elizabeth Warren, who was part of the Democratic revolt on the Senate Banking Committee against a Summers nomination, gave Yellen a thumbs-up on Wednesday.
“Janet has extraordinary experience and a proven track record of strong judgment and management savvy,” Warren said in a statement.
The committee’s senior Republican, Mike Crapo, was more measured, saying her nomination would be “carefully reviewed,” noting his own opposition to the Fed’s $85 billion a month bond-buying stimulus, known as quantitative easing.
Markets were little moved by the nomination, with the S&P 500 stock index ending the day flat, and the U.S. dollar edging higher along with long-term bond yields.
International Monetary Fund Managing Director Christine Lagarde called the nomination “great”.
“She’s very competent, she’s my friend, I’m delighted she’s there,” said Lagarde, who in recent months has sternly warned the Fed not to cut back its stimulus too fast to avoid injecting more turbulence into global markets.
However, one of Yellen’s first tasks will be to judge how quickly to taper the huge stimulus.
Economists and markets had expected the cuts to begin last month.
But the Bernanke-led Federal Open Market Committee held off, pointing to some signs of weakness in the economy and the threat to stability posed by Washington’s political paralysis over the budget and debt ceiling.
Ian Shepherdson of Pantheon Macroeconomics said the FOMC is likely to hold off on the stimulus taper until next year.
“It’s difficult to imagine sufficient improvement in the hard employment data could emerge in time for Dr. Yellen to push for tapering at her very first meeting as chairman, on March 18/19. The June meeting, in our view, is a better bet.”
Copyright 2013 The National Memo