Nominee for the Federal Reserve Board Chairman Janet Yellen testifies during her confirmation hearing Nov. 14, 2013 on Capitol Hill in Washington, DC. Yellen will be the first woman to head the Federal Reserve if confirmed by the Senate. Photo by Alex Wong/Getty Images
Hide Caption

Senate panel advances Janet Yellen's bid to lead Federal Reserve

a a a a
Share this story

WASHINGTON (AP) -- A Senate panel has advanced Janet Yellen's nomination to lead the Federal Reserve, setting up a final vote in the full Senate. The timing of a Senate vote isn't clear, but Yellen is widely expected to win confirmation.

The Senate Banking Committee approved the nomination 14-8. All the no votes came from Republicans, several of whom say they object to the Fed's aggressive low interest-rate policies to support the economy.

Yellen was nominated by President Barack Obama in October to succeed Ben Bernanke, whose second four-year term as chairman will end Jan. 31.

Some senators have said they plan to hold up Yellen's nomination as leverage on other matters. That tactic is likely to delay but not derail Yellen's confirmation.

Yellen would be the first woman to lead the Fed and the first Democrat to do so since Paul Volcker stepped down in 1987. She made clear at the committee's hearing last week that she's prepared to support the Fed's extraordinary efforts to bolster the economy until there are clear signs of a sustained rebound and further improvement in the job market.

As a result, the Fed's low-rate policies are expected to continue under her leadership. Yellen has been a close Bernanke ally, first as president of the San Francisco regional Fed bank, and then since 2010 as vice chair of the Fed's board in Washington.

Yellen and Bernanke are both considered "doves" - Fed officials who stress the need to fight unemployment during periods of economic weakness. By contrast, "hawks" tend to worry more about inflation that could arise from the Fed's policymaking.

In the view of Fed watchers, Yellen's testimony last week solidified her dovish reputation. She maintained that the Fed's bond buying program has successfully supported the economy by keeping long-term borrowing rates. And she minimized concerns that critics have raised about the bond purchases.

The Fed is adding to its investment portfolio with $85 billion a month in bond purchases. Its holdings are nearing $4 trillion, more than four times their level before the financial crisis struck in the fall of 2008.

Republican critics say they fear that by flooding the financial system with money, the Fed has inflated stock and real estate prices and could create asset bubbles that could pop with dangerous consequences for the economy.

Some say they also worry that the Fed's eventual unwinding of its investment holdings will unsettle financial markets, sending stock prices falling and interest rates rising and threatening the economic recovery.

Sen. Mike Crapo, R-Idaho, said before Thursday's vote that he would oppose her because of his disapproval of the Fed's easy money policies.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Print this article

Comments

Hmm... It looks like you’re not a WCPO Insider. or Subscribe now to contribute!

More Politics News
Waynesville mayor has modest political hopes
Waynesville mayor has modest political hopes

Dave Stubbs aims to survive (his) term as mayor of the historical city and still be on speaking terms with his friends and neighbors.

Did political shenanigans nix heroin bill?
Did political shenanigans nix heroin bill?

As political and business leaders sort through the aftermath of 2014 Kentucky General Assembly, some are wondering whether an effort to help…

RNC team to visit Cincinnati late April
RNC team to visit Cincinnati late April

The two Ohio cities still in contention to host the 2016 Republican National Convention will be visited in late April by party staff or…

Kasich touts jobs record, talks about big issues
Kasich touts jobs record, talks about big issues

Ohio Gov. John Kasich touted his record of creating jobs and talked about big issues for the Cincinnati area in an exclusive interview with WCPO.

Judge: Ohio must recognize legal gay marriages
Judge: Ohio must recognize legal gay marriages

A federal judge says he will strike down Ohio's voter-approved ban on gay marriage, meaning the state must recognize marriages of gay…

Boehner buys TV ad time in his Ohio district
Boehner buys TV ad time in his Ohio district

House Speaker John Boehner is spending $125,000 on television ads in his Ohio district to fend off three fellow Republicans in the primary.

Ohioans closer to hunting with gun silencers
Ohioans closer to hunting with gun silencers

Members of the Ohio House of Representatives have voted in favor of a local politician's bill that would allow hunters to use silencers…

US created 'Cuban Twitter' to stir unrest?
US created 'Cuban Twitter' to stir unrest?

In July 2010, Joe McSpedon, a U.S. government official, flew to Barcelona to put the final touches on a secret plan to build a social media…

Reading mayor's roots are 3 generations deep
Reading mayor's roots are 3 generations deep

Bo Bemmes is proud of Reading's claim to fame as home of John Boehner--not to mention the world's largest bridal district.

Pause in streetcar construction cost city $1M
Pause in streetcar construction cost city $1M

A nearly three-week pause in streetcar construction in December cost Cincinnati almost $1 million, city officials said Tuesday.