The U.S. Senate voted to confirm Janet Yellen as the next head of the Federal Reserve on Monday, making Yellen the first-ever woman to chair the Fed and, arguably, the most powerful woman in the world.
“She has proven through her extensive and impressive record in public service and academia that she is most qualified to be the next chair,” Democratic Sen. Tim Johnson said Monday, according to the Washington Post. “Americans should feel reassured that we will have her at the helm of the Fed as our nation continues to recover from the Great Recession.”
Yellen will take office while the Fed is at a crossroads. Over the past five years, it has pumped trillions of dollars into the economy through bond purchases to lower borrowing costs for consumers and businesses and boost the recovery. Now, it is starting to scale back that support — a delicate task that risks jeopardizing the economy’s progress. A wrong move could also send Wall Street into panic mode.
“There is no question there could be unintended consequences,” New York Fed President William Dudley said at a conference in Philadelphia on Saturday, describing the challenge that Yellen and other central bank officials will face in coming years.
Yellen will inherit an economy that is no longer in freefall but is far from fully healed. Unemployment remains stubbornly high while inflation is perplexingly low, and government spending cuts have undermined the recovery’s momentum. Stock markets have soared to record highs, but economic growth has been so anemic that many Americans believe the nation is still in recession.