After months of speculation, it's official: Janet Yellen will be the next chair of the Federal Reserve, succeeding Ben Bernanke, the White House said late Tuesday. President Obama will make the announcement on Wednesday at 3pm ET, the White House said. Both Janet Yellen and current Fed chair Ben Bernanke are expected to attend. That announcement will be right after the Fed releases the minutes from its last meeting, due out at 2pm ET. Dow and S&P futures shot higher following the announcement, pointing to a higher open on Wall Street Wednesday. What are futures doing now? Click here for the latest futures action. "Markets are giving Yellen the thumbs up, counting on quantitative easing being maintained at full pace until further notice," Sean Callow, senior currency strategist at Westpac in Sydney, told Reuters after the announcement.

Andrew Harrer | Bloomberg | Getty Images

"It's a notable reaction given Yellen's nomination was so widely expected and that it comes at a time markets are already assuming the Federal Open Market Committee will not seriously consider a policy change at the October meeting given the fiscal standoff."

Yellen is seen as a dove on monetary policy, favoring strategies that bring down unemployment even at the risk of driving inflation higher. She has said she does not believe there is often conflict between the two Fed goals.

(Read more: Bill Gross: Fed will have to taper stimulus) "When the goals conflict and it comes to calling for tough trade-offs, to me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target," she said in 1995. If confirmed, she'll have a tough job ahead of her: She will have to oversee the tricky process of reversing the extraordinary stimulus the U.S. central bank put in place to shore up the world's largest economy, which eclipses Japan and China put together. (Read more: No end in sight for debt addiction: Paul Singer) "I don't think it's going to be a surprise to the market ... but certainly it suggests that the Fed is going to continue with a dovish policy," Peter Cardillo, chief market economist at Rockwell Global Capital, told Reuters.

"I'm calling for them to perhaps begin scaling back [quantitative easing] slightly in December but a lot of that depends on the outcome of the Washington shutdown and above all the debt ceiling ... If the impact of the Washington shutdown weighs more heavily on the economy, that could push it back until the first quarter of 2014."

(Read more: House GOP doesn't get to demand ransom: Obama) Yellen, 67, is currently the vice chairman of the Fed and has been widely reported as a front-runner to succeed Bernanke when his term ends in January. In recent months it had largely come down to a two-horse race: Most expected either Yellen or former Treasury Secretary Larry Summers to get the nomination. Summers was widely viewed to be Obama's favorite but after a massive campaign of economists and others making the case for Yellen, Summers dropped out of the race last month. If approved by the Senate, her appointment would crack one of the highest U.S. glass ceilings and make her the first woman to head the central bank in its 100-year history.

She is expected to garner enough support to secure the 60 votes needed to overcome any procedural hurdles in the 100-seat Senate. Democrats control the chamber 54-46.