Republican lawmakers raised concern Wednesday that President Barack Obama’s pick to lead the Federal Reserve might be too willing to tolerate inflation and too inclined to support economic stimulus efforts, but only a few signaled that they intend to oppose her confirmation.
Obama formally nominated Janet Yellen, the vice chair of the Federal Reserve, to head the world’s most important central bank. The current chairman, Ben Bernanke, joined them at the White House announcement.
“She is a proven leader and she is tough. Not just because she is from Brooklyn,” the president said.
Yellen “sounded the alarm early about the housing bubble,” Obama noted, adding that she’s “exceptionally qualified” and “listens to competing views and brings people together around a common goal.”
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“Janet Yellen has the background, experience and knowledge to be a fine chairwoman of the Federal Reserve,” said Sen. Dianne Feinstein, D-Calif., the head of the Senate Intelligence Committee.
“President Obama has made an outstanding choice in nominating my colleague and friend Janet Yellen to chair the Federal Reserve Board,” Bernanke said later in a statement. “Janet is exceptionally well qualified for the position, with stellar academic credentials and a strong record as a leader and a policymaker.”
Not only is Yellen an economist, but also her husband, George Akerlof, is a 2001 Nobel Prize-winning economist and their son, Robert, is an economics professor at the University of Warwick in England.
“You can imagine the conversation around the dinner table might be a little different than ours,” Obama joked.
In brief comments at the White House announcement, a beaming Yellen noted that “the past six years have been tumultuous for the economy and challenging for many Americans.” Sounding a populist note that will play well with Democrats who control the Senate, Yellen said, “Too many Americans still can’t find a job and worry how they’ll pay their bills and provide for their families.”
Yellen and Obama praised Bernanke, who’ll step down Jan. 31 after eight years that included the 2008 financial crisis and the Great Recession. He didn’t speak at the ceremony.
Yellen, who’s 67, has been joined at the hip with Bernanke in implementing the controversial bond-buying programs that some Republicans allege are akin to printing new money. It’s this effort, called quantitative easing, that provoked outright opposition from at least two GOP senators.
“Vice Chair Yellen will continue the destructive and inflationary policy of pouring billions of newly printed money every month into our economy, and artificially holding interest rates to near zero,” Sen. Pat Roberts, R-Kan., said in a statement. “This policy has been in place far too long.”
“Ms. Yellen subscribes to the liberal school of thought that the best way to handle our nation’s fiscal challenges is to throw more money at them,” Sen. John Cornyn, R-Texas, a member of the Senate Finance Committee, said in a statement. “This stimulus obsession is the reason the nation finds itself in the fiscal calamity it does today, and the last thing we need is a leader at the helm of the Federal Reserve who is intent on more quantitative easing that harms our economy and further burdens hardworking Americans.”
Sen. Bob Corker, R-Tenn., a member of the Senate Banking Committee, has noted that he’d opposed Yellen’s nomination to become the Fed’s vice chair in 2010 and hasn’t changed his views. If anything, he said, he now has more questions.
“Any evidence if quantitative easing is actually working relative to employment? And . . . I want to make sure that she doesn’t view herself as an enabler of bad policy within the Congress itself,” Corker said on CNBC.
Other Republican senators signaled concern but not outright opposition.
Alabama Sen. Jeff Sessions made it clear that he’d make Yellen’s nomination a debate over the Fed’s controversial bond-buying efforts, now at a pace of $85 billion a month in a bid to knock down long-term lending rates and stimulate economic activity.
“I intend to fairly but rigorously scrutinize this nominee. What we need in the Fed is a policy of humility that recognizes its limitations and the risk of continued easing,” Sessions said in a statement. He added, “The stimulus mindset in Washington – both fiscal and monetary – has not produced strong, sustainable growth.”