Washington, D.C. is preparing for Janet Yellen’s nomination proceedings for Federal Reserve chair, and it appears increasingly likely that she will be confirmed. The only known obstacle standing in the way of her assumption of that most high office is Rand Paul, who announced his plans to put the banker’s nomination on hold.
Yellen was officially nominated by President Obama on October 9 after a long period of front-runner status following Larry Summers’ exit from contention. Yellen has had an extensive relationship with the Federal Reserve system: She’s served as the head of the San Francisco branch president, and currently serves as vice chair of the Federal Open Market Committee board of governors. She’s famous for emphasizing the labor and employment aspects of the Federal Reserve’s mandates. Known as an inflation “dove,” it is widely speculated that Yellen will gladly continue the Fed’s policy of low interest rates even after reaching stated target unemployment levels.
The Federal Reserve Board of Governors seemed to have been anticipating Yellen, and it is likely that a transition from Bernanke to Yellen will be smooth, given that Yellen will likely continue or accelerate quantitative easing policies such as have characterized the last few years of Bernanke’s second term.
Yellen will soon begin meeting with members of Congress, most notably the Senate Banking Committee, where certain members have doubled as cheerleaders for her nomination, and will likely continue to wave pom-poms as she undergoes the hearing process. Recent filibusterer Ted Cruz, meanwhile, has vowed to keep an “open mind” on Yellen, suggesting that he won’t stand in the way of the nomination. Rand Paul, another filibusterer and someone who has a strong aversion to the current state of the Federal Reserve, will almost certainly put up resistance, but it’s not clear whether he will be able to singlehandedly stall or block the nomination.
Markets are anticipating the usual stimulus efforts from the Fed, meanwhile, and gold is beginning to rebound from its losses last summer.