Yellen sounded alarm about US housing bubbleComment on this story
Washington - Janet Yellen leaves nothing to chance.
The 67-year-old, approved by the Senate Monday to head the US Federal Reserve, is reputed to be a cautious, but ambitious, thinker with a sharp intellect.
The current Fed vice chairwoman, who will take over the top job in early February, is known for dogged preparation.
Debating against her is usually a lost cause because her arguments are rock solid.
“It slightly worries me that when people find a problem, they rush to judgement of what to do,” Yellen once said.
Praise has been heaped on Yellen since she became the front-runner to take over from Ben Bernanke.
She warned of overoptimism in real estate in 2007, before most of her colleagues at the Fed recognised the crisis.
“Janet is renowned for her good judgement,” US President Barack Obama said when nominating her on October 9.
“She sounded the alarm early about the housing bubble, about excesses in the financial sector and about the risks of a major recession.”
After an uneventful confirmation hearing, she was approved by the Senate Banking Committee, making passage of her nomination by the full Senate all but certain.
The chamber voted 56-26 to confirm her Monday.
Valued for taking decisions based solely on the evidence and not on intuition, Yellen has a reserved manner that belies strong leadership qualities and resilience.
As a young woman, Yellen wanted to make a contribution to society through the use of logic, so she chose to study economics, her biographies said.
Born on August 13, 1946, in Brooklyn, a working-class borough of New York City, Yellen earned a doctorate from Yale University before becoming an assistant professor of economics at rival Harvard University.
By 1977, she moved to the Fed in Washington, where she met her husband, fellow economist George Akerlof and future Nobel laureate, in the central bank's cafeteria.
The couple first taught together at the London School of Economics.
Yellen's research focused on labour economics and she came to the belief that markets were not always optimally efficient and needed state regulation.
To this day, Yellen is seen as sceptical of Wall Street experts, though she has never come out in favour of breaking up the major banks.
In 1994, she rejoined the Fed, and president Bill Clinton appointed her in 1996 to his team of economic advisers.
Yellen later was appointed president of the Federal Reserve Bank of San Francisco in 2004.
She said in 2010 during a hearing on her nomination to the number two Fed post that regulation was “insufficient” ahead of the crisis.
“We failed completely to understand the complexity of what the impact of the decline - the national decline - in housing prices would be in the financial system,” Yellen said.
Detractors on the right have long questioned her “dovish” inflation stance, suggesting she is too inclined towards monetary stimulus to promote employment to the detriment of price stability.
Since becoming vice chairwoman, she has backed Bernanke's easy money policy aimed at reviving the US economy, at times calling for even stronger measures to boost the anaemic jobs market, despite dangers of inflation or new investment bubbles.
“I'm just opposed to a pure inflation-only mandate in which the only thing a central bank cares about is inflation and not employment,” Yellen said.
Global financial markets are now watching with interest how Yellen will tackle the tasks at hand-foremost an exit from the country's unprecedented loose monetary policy. - Sapa-dpa