Janet Yellen will make history as the first woman to lead the Federal Reserve, becoming its chairwoman at a key moment for the central bank as it attempts to unwind its unprecedented efforts to boost the economy in the aftermath of the financial crisis.
The Senate voted 56 to 26 on Monday to confirm Yellen to replace Chairman Ben Bernanke, whose term expires Jan. 31. Yellen, who has been vice chairwoman of the Fed since October 2010, is expected to begin her new post Feb. 1.
While Bernanke navigated the Fed through the 2008 financial crisis and the ensuing recession during his eight year tenure, it will be Yellen’s job to manage the retreat from these policies as the economy gains strength and is better able to stand on its own.
The Fed has spent recent years buying massive piles of Treasury and mortgage bonds through so-called quantitative easing — its balance sheet is now more than $4 trillion — in an effort to keep long-term interest rates low and spur on the economy. How to exit this program and then shrink the balance sheet without rattling financial markets and hurting the economy will be job number one for Yellen.