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Yellen Is Obama Choice To Succeed Bernanke At Fed

Sen. Tim Johnson, D-S.D., who heads the Senate Banking Committee, which must approve Yellen's nomination, said he would work with the panel's members to advance her confirmation quickly.

"She has a depth of experience that is second to none, and I have no doubt she will be an excellent Federal Reserve chairman," Johnson said in a statement.

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 decision on increasing 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.

While the announcement would be overshadowed by the ongoing impasse, the White House says that with Yellen's vetting completed, there was no need to wait to nominate her, especially since the timing of the end of the shutdown remained uncertain and the Senate would need to get her confirmation process underway.

Mark Zandi, chief economist at Moody's Analytics, said the administration probably decided to go ahead with the announcement to send a signal of policy stability to financial markets, where investors are growing increasingly nervous over the shutdown and the possibility of default.

"Markets are very unsettled and they are likely to become even more unsettled in coming days," Zandi said. "Providing some clarity around who will be the next Fed chairman should help at least at the margin."

The search for a successor to Bernanke grew unusually public when Summers and Yellen emerged as the top two contenders. Through August and into September, Yellen and Summers themselves kept a low profile but their warring camps waged a fight that stirred up Congress, spawned opinion columns and letters from Congress, and triggered commentary from notables both inside and outside the economics profession.

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