By MARTIN CRUTSINGER and JIM KUHNHENN
WASHINGTON (AP) â¿¿ President Barack Obama will nominate Federal Reserve vice chair Janet Yellen to succeed Ben Bernanke as chairman of the nation's central bank, the White House said Tuesday. Yellen would be the first woman to head the powerful Fed, taking over at a pivotal time for the economy and the banking industry.
Both Yellen and Bernanke are scheduled to appear with Obama at the White House on Wednesday for a formal announcement.
Bernanke will serve until his term ends Jan. 31, completing a remarkable eight-year tenure in which he helped pull the U.S. economy out of the worst financial crisis and recession since the 1930's.
Under Bernanke's leadership, the Fed created extraordinary programs after the financial crisis erupted in 2008 that are credited with helping save the U.S. banking system. The Fed lent money to banks after credit markets froze, cut its key short-term interest rate to near zero and bought trillions in bonds to lower long-term borrowing rates.
Yellen, 67, emerged as the leading candidate after Lawrence Summers, a former Treasury secretary whom Obama was thought to favor, withdrew from consideration last month in the face of rising opposition.
A close ally of the chairman, she has been a key architect of the Fed's efforts under Bernanke to keep interest rates near record lows to support the economy, and she would likely continue steering Fed policy in the same direction as Bernanke.
The White House announcement comes in the midst of a confrontation between Obama and congressional Republicans, particularly those in the House, over the partial government shutdown and the looming breach of the nation's $16.7 trillion borrowing limit. Obama has been harshly critical of Republicans for demanding either changes in health care or spending policies in exchange for paying for government operations and raising the debt ceiling.