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Washington – US President Barack Obama planned to nominate Janet Yellen yesterday as the first woman to head the rate-setting Federal Reserve, according to media reports citing White House officials.
The Wall Street Journal reported that Obama is expected to make the announcement at 1500.
Yellen, aged 67, has served as vice chairperson of the US central bank and, if confirmed by the Senate, would succeed Ben Bernanke when his term as chairperson expires on 31 January.
The announcement would come with foreign ministers and central bank chiefs participating in twice-annual joint meetings this week in Washington of the crisis-lending International Monetary Fund and its sister development agency, the World Bank.
The Fed next meets on 29-30 October in Washington amid widespread expectations that it will begin scaling back its slack monetary policy.
Under Bernanke, the Fed has been pumping $85bn a month into financial markets, some $1 trillion a year into the $16 trillion US economy by buying government backed bonds, closing off traditional safe haven investments to push money into the private sector.
The central bank’s benchmark interest rate has been at a never before seen near zero since December 2008, and is not expected to be raised for years to come. The Fed faces “new and delicate” problems to communicate its monetary policy plans with a minimum of market disruption, the IMF said.
The expected announcement comes with the US government in partial shutdown since 1 October, as Congress has been unable to pass even a short term budget measure.
Obama’s Treasury Department has warned that unless Congress further passes a hike in the country’s legal debt limit by 17 October, the government will be unable to meet all its obligations.
IMF chief economist Olivier Blanchard said on Tuesday that in the event of a voluntary default on US debt, “what is now a recovery could turn into a recession – or even worse”. – Sapa
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