Janet Yellen has been confirmed by the Senate as the next chair of the Federal Reserve. She will replace Ben Bernanke and will be the first woman to ever hold the position. While the vote is being touted with praise by much of the media, her vote by the Senate was a record. A record low!
The Senate voted of 56-26 to confirm Yellen. This is lower than the 2010 reconfirmation of Ben Bernanke as chairman with his 70-30 vote.
24/7 Wall St. has very mixed emotions about Yellen. It is nice to see that a woman now will have held perhaps the most powerful financial position in the world. At the same time, Yellen comes across as very dovish, and she supports the endless easy money policies, as long as it does not blow up inflation.
Yellen is also 67 years of age, and the promise to begin tapering the $85 billion in monthly bond buying was made by Ben Bernanke. We know with some certainty that, if the economy heads south again, Yellen probably will treat the bond buying move as her Pavlov Dog response to stimulate the economy.
The biggest question we have is how the Yellen Federal Reserve will begin to unwind what is now more than $4 trillion in assets. As we had previously forecast, the Fed’s balance sheet crossed that $4 trillion mark in December.
Bernanke’s term as chairman concludes at the end of this month. It will be interesting to see how the January 29 to 30 FOMC meeting progresses with Yellen taking up the reins within hours of the end of that meeting.