In a ceremony at the White House, President Barack Obama officially announced Federal Reserve Vice Chairman Janet Yellen as his nominee to lead the Federal Reserve Wednesday afternoon. If confirmed, she would be the first woman to head the nation's central bank.
Flanked by Yellen and current Chairman Ben Bernanke, Obama praised Yellen for her experience and intelligence.
"Janet is exceptionally well qualified for this role," he said. "She's served in leadership positions at the Fed for more than a decade. As vice chair for the past three years, she's been exemplary and a driving force in policies to boost our economic recovery."
He also pointed to Yellen's foresight ahead of the financial crisis. As president of the San Francisco Federal Reserve Bank in 2007, Yellen was among the first to raise concerns about a coming crisis in housing.
"She doesn't have a crystal ball, but what she does have is a keen understanding about how markets and the economy work," Obama said.
Obama also took the time to praise Bernanke's leadership of the central bank. Obama nominated Bernanke, a George W. Bush nominee, for his second term in 2009, amid economic catastrophe. Calling Bernanke "the epitome of calm," Obama credited the outgoing chairman with steering the U.S. economy through a difficult recession.
"Against the volatility of global markets, he has been a voice of wisdom and a steady hand," Obama said.
The nomination comes after a long and divisive public debate about who should succeed Bernanke as chairman when his term expires in January. Larry Summers, a former economic advisor to Obama, was rumored to be the president's top choice, but dropped out of the running in September amid criticisms from Democrats on Capitol Hill.
Several Democratic senators have expressed support for Yellen. Senate Banking Committee Chairman Tim Johnson, D-S.D., released a statement late Tuesday approving of Yellen as a nominee.
"She has a depth of experience that is second to none, and I have no doubt she will be an excellent Federal Reserve Chairman," he said, as reported by MSNBC.
However, support among Republicans may be tougher to come by. Some conservatives disapprove of the Fed's asset purchase program known as quantitative easing, believing it creates inflation risks.
"A legitimate concern for many is whether Dr. Yellen will continue, or worse expand, the Fed's stimulus of Wall Street with the uncertainty it brings to Main Street and the risk of future inflation," said Rep. Kevin Brady, R-Texas, chairman of the Joint Economic Committee, in a Wednesday statement. "Clearly, if quantitative easing were succeeding in its goal of boosting employment, then America would not be experiencing a historically weak recovery four years after the recession ended."
If confirmed, Yellen would face the task of unwinding the Fed's stimulus policies as the economy continues to recover from the Great Recession.
Yellen struck a populist tone in her remarks, emphasizing the effects of Fed policies on average Americans.
"The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they'll pay their bills and provide for their families," she said. "The Federal Reserve can help if it does its job effectively. We can help ensure that everyone has the opportunity to work hard and build a better life."
Both Yellen and Obama also emphasized the importance of the dual mandate, the Fed's charge to both foster high employment and price stability. Obama named the understanding of the dual mandate as his key criterion in choosing the Fed chairman, and Yellen echoed that sentiment in her remarks.
"If confirmed by the Senate, I pledge to do my utmost to keep that trust and meet the great responsibilities that Congress has entrusted to the Federal Reserve: to promote maximum employment, stabile process, and a strong and stable financial system," she said.
Some critics, particularly conservatives, attack the Fed's dual mandate, saying the Fed should focus solely on price stability. Monetary policy, they argue, is an ineffective and potentially counterproductive tool in trying to boost employment. For her part, Yellen has been vocal in promoting the Fed's accommodative policies like quantitative easing as successful in boosting employment.
Yellen will now move on to face Senate confirmation, a process Obama said he hoped would move quickly.
"Given the urgent economic challenges facing our nation, I urge the senate to confirm Janet without delay," he said.