Incoming Federal Reserve chair Janet Yellen launched a staunch defence of the Fed’s massive economic stimulus programme at her confirmation hearing Thursday.

Yellen, expected to be the first woman to head the Fed, took questions from the Senate banking committee ahead of her confirmation, which is expected to be a formality.

Poised and well-prepared, Yellen sailed through the two-hour hearing. Democratic senator Chuck Schumer said he hoped her "Brooklyn wisdom shines through".

"I never forget my roots," she replied.

Yellen said the US economy had improved significantly since the 2008 financial crisis but she said that the recovery was not yet strong enough for the Fed to pull back on its $85bn-a-month economic stimulus programme, known as quantitative easing.

"We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession," Yellen, the current Fed vice-chair, said her opening statement.

“Unemployment is down from a peak of 10%, but at 7.3% in October, it is still too high, reflecting a labor market and economy performing far short of their potential. At the same time, inflation has been running below the Federal Reserve’s goal of 2% and is expected to continue to do so for some time.”

Yellen’s position attracted criticism from Republican senators worried about the unintended consequences of the Fed’s bond-buying stimulus, which is aimed at keeping interest rates at record lows.

Senator Mike Johanns said: “I just worry that we are on a sugar high.” He said stock market investors had become too dependent on the Fed programme and it was hyping certain assets, including stocks and housing. "What am I missing here?" he said. "I see asset bubbles."

"We have to watch this very carefully, but I don't see this as an asset bubble," said Yellen.

Senator Bob Corker said: “In many ways easy money is an elitist policy.” He said there was little evidence that it had “trickled down”.

Yellen’s appointment was widely seen as a signal that the QE programme was unlikely to be cut back in the short term, as she has been one of its staunchest supporters. The QE programme has faced mounting criticism from other members of the Fed.

Yellen once again defended the programme. She said that the QE programme had boosted the stock markets but said it had also played an important role in the housing market.

“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Yellen said.

Yellen expressed support for Ben Bernanke's efforts to make the Fed "a more open and transparent institution," and said she will also move to bolster the central bank’s role as a regulator.

"We need her expertise at the helm of the Fed as our nation continues to recover from the Great Recession, completes Wall Street Reform rulemakings, and continues to enhance the stability of our financial sector," Senate banking committee chair Tim Johnson said.