Fed Reserve: Yellen Secures Obama Nomination
In a history-making selection, President Barack Obama has nominated Janet Yellen to be chairman of the Federal Reserve.
The move, subject to confirmation by the US Senate, would make Ms Yellen the first woman to lead the powerful central bank.
Mr Obama introduced Ms Yellen on Wednesday as a "proven leader".
He credited her for being a consensus builder, adding: "She understands the human cost when people can't find a job."
Current Fed chair Ben Bernanke will serve until his term ends on January 31, completing an eight-year tenure in which he helped pull the US economy out of the worst financial crisis and recession since the 1930s.
Under Mr Bernanke's leadership, the Fed created programmes after the financial crisis of 2008 that are credited with helping save the US banking system.
The Fed lent money to banks after credit markets froze, cut its key short-term interest rate to near zero and bought trillions in bonds to reduce long-term borrowing rates.
The president praised Mr Bernanke for taking "bold action" at the height of the crisis to "shore up our banks and get credit flowing again".
He said: "Ben Bernanke is the epitome of calm, and against the volatility of global markets he's been a voice of wisdom and a steady hand."
Ms Yellen, 67, emerged as the leading candidate to replace Mr Bernanke after Larry Summers, a former Treasury secretary, withdrew from consideration last month in the face of rising opposition.
A close ally of the current chairman, Ms Yellen is seen as a so-called dove as she has been a key architect of the Fed's efforts to keep interest rates near record lows.
The White House announcement comes amid a confrontation between Mr Obama and congressional Republicans, particularly those in the House, over the partial government shutdown and the looming breach of the nation's $16.7trn borrowing limit.
Mark Zandi, chief economist at Moody's Analytics, said that the administration probably decided to go ahead with the announcement to send a signal of policy stability to financial markets, where investors are growing increasingly nervous over the partial shutdown and what they perceive as the much bigger threat of a default on Treasury debt.
He said: "Markets are very unsettled and they are likely to become even more unsettled in coming days.
"Providing some clarity around who will be the next Fed chairman should help at least at the margin."
As vice chair since 2010, Ms Yellen has helped manage both the Fed's traditional tool of short-term rates and the unconventional programmes it launched to help sustain the economy after the financial crisis.
These include the Fed's monthly bond purchases and its guidance to investors about the likely direction of rates.
Senator Tim Johnson, a Democrat who heads the Senate Banking, Housing and Urban Affairs Committee, said he would work with the panel's members to advance her confirmation quickly.
"She has a depth of experience that is second to none, and I have no doubt she will be an excellent Federal Reserve chairman," Mr Johnson said.
Sen Chuck Schumer, a Democratic committee member, called her "an excellent choice" and predicted she would be confirmed by a wide margin.
Mr Obama's choice of Ms Yellen coincides with a key turning point for the Fed. Within the next several months, it is expected to start slowing the pace of its Treasury and mortgage bond purchases if the economy strengthens.
While economists saw Mr Obama's choice of Ms Yellen as a strong signal of continuity at the Fed, analysts said the difficult job of unwinding all of the Fed's support without causing major financial market upheavals would fall to her.