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Janet Yellen at swearing in as chair of the Federal Reserve Board, Feb. 3, 2014
Federal Reserve Board Governor Daniel Tarullo swears in Janet Yellen as chair
of the Federal Reserve Board Monday morning.
In a brief ceremony Monday morning in Washington, D.C., Janet Yellen was sworn in as the first woman to chair the Federal Reserve Board for a term that ends in 2018. Her predecessor, Ben Bernanke, is heading off to the Brookings Institution's Hutchins Center on Fiscal and Monetary Policy where he will serve as Distinguished Fellow in Residence. In a press release, Hutchins Center Director David Wessel said:
"Ben Bernanke won't have to sit through any more meetings of the Federal Open Market Committee or deliver the Fed's semi-annual testimony to an occasionally hostile Congress or listen to complaints from emerging-market central bankers when central bankers gather in Basel, Switzerland. He won't have to check the computer screen to see what's been happening in Asian markets when he gets up every morning.
Those tasks will now be up to Yellen whose rise to the top post at the Fed was boosted by progressive senators and a grassroots campaign focused on getting her the job and keeping President Obama's favored candidate, Larry Summers, out of it. Daily Kos was part of that campaign, delivering 130,000 petition signatures for Yellen's nomination to the office of Democratic Sen. Sherrod Brown of Ohio last August.

Please read below the fold for more about Yellen.

The appointment makes her one of the world's most powerful people, male or female. But, as Ylan Q. Mui notes, Yellen's ascent came at a time when women were just beginning to make themselves felt in economic circles. Prejudice from her male peers, as well as a strong dose of institutionalized sexism, slowed her rise:

She was the only woman in her PhD class at Yale University. In her early years as an academic and economist, she was dogged by skepticism of her abilities and overshadowed by her more extroverted and well-known husband, according to friends and longtime acquaintances. But the tables turned later in Yellen’s career as her family accommodated her growing star power.

Other women in similarly high-level positions have tackled the gender issue more directly. Christine Lagarde, the International Monetary Fund’s managing director, famously suggested that the financial crisis might have been less painful if more women had been in charge. Hillary Rodham Clinton made improving the lives of young girls a hallmark of her tenure at the State Department. Even German Chancellor Angela Merkel, who had made a point of avoiding gender debates, backed legislation to increase the number of women on the boards of the country’s publicly traded companies.

Yellen’s silence is a reminder that the workplace can still be treacherous terrain for many women. She didn’t speak out when President Obama mistakenly referred to her as “Mr. Yellen,” nor when a few snarked that she wore the same outfit to her confirmation hearing and nomination ceremony. Instead, Yellen — who declined to comment for this article — deployed the same strategy she has used for the past 40 years: letting her work speak for itself.

One of Yellen's key tasks will be guiding what at the moment is a winding down of the Fed's quantitative easing program. In its fourth iteration since the Great Recession spurred it into action, quantative easing currently consists of buying $65 billion in Treasury bonds and mortgage-backed securities each month, having been reduced from $85 billion a month late last year.

Supporters view this as a means of strengthening the economy until the unemployment rate falls, with 6.5 percent being the target. Critics reject it for various reasons depending on their ideological views, with some on both the left and right viewing it as a giveaway to big banks since many of those mortgage-backed securities being bought are toxic assets the banks are glad to shed.

If traditional measurements of the economy continue to improve, as they have been doing fairly steadily throughout 2013, quantitative easing could be gone by the end of the third quarter. But previous predictions of big improvements have been followed in 2010, 2011, 2012 and the first half of 2013 by disappointments. And on Monday, the Institute for Supply Management issued its manufacturing report that could indicate the beginning of disappointment for 2014. The ISM manufacturing index fell sharply from 56.2 percent in December to 51.3 percent in January. That, of course, is just one data point among many, but it's an important one, and the stock market replied to it with a steep 326-point plunge.

One of Yellen's selling points for progressives during the campaign to get her the nomination is that, throughout her career, long before she was in a position to do anything about it, she tended to favor policies designed to reduce unemployment rather than worrying much about how such policies might increase inflation. If more economic reports like that from ISM appear—the January jobs report is due out Friday—that could mean Yellen will push to reverse the retreat on quantitative easing.

She also seems likely to emphasize the Fed's new financial institution regulatory role under Title XI of the Dodd–Frank Wall Street Reform and Consumer Protection Act. That  very modest financial reform passed in 2010 but is still not fully implemented.

Nobody can dispute Yellen's sparkling credentials. But she's not experienced on the political and media side of things, which could certainly prove to be a drawback. Her first test is likely to come on Feb. 11 when she appears before the House Financial Services Committee. She'll reprise that two days later for the Senate Banking Committee. Neither of those two sessions is the kind of appearance decent human beings would wish on their worst enemy.

Originally posted to Meteor Blades on Mon Feb 03, 2014 at 02:03 PM PST.

Also republished by Daily Kos.

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