Obama nominates Yellen as Fed chair

David Jackson | USA TODAY

Show Caption Hide Caption Obama says Yellen is his choice to take over Fed President Barack Obama says that in Janet Yellen he's found a tough and proven leader to take over as chairman of the Federal Reserve. Yellen currently is No. 2 at the nation's powerful central bank.

President Obama formally nominates Janet Yellen to be the new Fed chair

Yellen is currently the Fed board%27s vice chair%2C would become first woman chair

Yellen would replace Ben Bernanke%2C who is retiring

President Obama formally nominated Janet Yellen on Wednesday to chair the Federal Reserve board, calling her "one of the nation's foremost economists and policy makers."

Saying she understands "the human costs" of a struggling economy, Obama said during a White House ceremony that "America's workers and their families will have a champion in Janet Yellen."

If confirmed by the Senate, Yellen would be the first woman to lead the nation's central bank, a key player in the global economy -- and "a role model for a lot of folks out there," Obama said.

She would also be the first Democrat to lead the Fed since President Jimmy Carter nominated Paul Volcker in 1979.

In brief remarks, Yellen said that economy is recovering, but more needs to be done, "particularly for those hardest hit by the Great Recession" that began in 2008.

Pledging "to promote maximum employment, stable prices, and a strong and stable financial system," Yellen said that "too many Americans still can't find a job, and worry how they'll pay their bills and provide for their families."

Yellen would replace Ben Bernanke, who is set to retire after completing his second four-year term on Jan. 31.

Naming Bernanke's successor, Obama said, is "one of the most important economic decisions that I'll make as president," noting that the Fed chair "is one of the most important policymakers in the world, and the next chair will help guide our economy after I've left office."

Obama cited Yellen's experience at the Fed, including its San Francisco bank, and praised her for sounding an early warning on the housing bubble. "She is a proven leader and she's tough, and not just because she's from Brooklyn," Obama said.

Obama made the nomination on the ninth day of the government shutdown. The U.S. is also eight days from hitting its $16.7 trillion debt ceiling, creating the prospect of a government default on its debts.

While members of the Democratic majority in the Senate predicted smooth confirmation of Yellen, at least one Republican raised a note of caution.

Sen. Bob Corker, R-Tenn., noted that he voted against Yellen's nomination for vice chair in 2010 because of her "dovish views" on monetary policy.

"We will closely examine her record since that time, but I am not aware of anything that demonstrates her views have changed," said Corker, a member of the Senate Banking Committee that will hold confirmation hearings for Yellen.

Sen. Charles Schumer, D-N.Y., meanwhile, said that "she's an excellent choice and I believe she'll be confirmed by a wide margin."

The Financial Services Forum, an organization of CEOs, welcomed Yellen's nomination.

Rob Nichols, the forum president, said his organization looks forward to working with Yellen and the Fed "to ensure a smooth and successful transition to more conventional monetary policy, a strong and stable financial system, and a growing economy."

In addition to her years as vice chair, Yellen also served as a governor for the San Francisco branch of the Fed.

During his eight years at the helm, Bernanke grappled with the worst economic crisis since the Great Depression of the 1930s.

Obama, who nominated Bernanke for his second term, praised the outgoing chairman for "strong leadership" during "some of the most daunting economic challenges of our lifetime."

Bernanke, the first Fed chair to hold regular news conferences, also helped Americans better understand the central bank's role, Obama said.

On his watch, the Fed lent money to banks facing a credit market freeze, cut short-term interest rates to near-zero, and lowered long-term rates by buying up trillions in bonds.

Yellen is expected to continue many of Bernanke's policies.

The White House ceremony ended an unusual political campaign for the job.

Supporters of Larry Summers, a former top aide to Obama and Treasury Secretary for President Bill Clinton, pushed him for the Fed slot. Summers, however, pulled his name from consideration last month amid rising opposition, including some Senate Democrats who said Summers has been too close to Wall Street.