JANET YELLEN Confirmed By Congress As First Female Federal Reserve Chair! Congrats!!

#JanetYELLEN

JANET YELLEN has been Confirmed by the U.S. Senate as the First FEMALE Federal Reserve Chair. CONGRATS!





ARTICLE: "Janet Yellen Will Be A Fed Chair For The Real, Every-Day Economy"


Janet Yellen, vice chairman of the Federal Reserve, was confirmed Monday by the Senate to succeed chairman Ben Bernanke as the next head of America’s central bank. Her term, which begins February 1st, will mark an important shift in the direction of the bank’s policy efforts, as it begins to “taper” back the last five years of unconventional monetary policy, which have resulted in the Fed pouring some $3.8 trillion into the U.S. economy following the financial crisis.

While Yellen’s appointment marks continuity with the Bernanke era, and with the Fed’s policy of “quantitative easing” of which she was one of the chief architects, it also heralds a number of firsts. Yellen is the first woman to head the central bank, but even more important, she’s also its first openly reform-minded, Keynesian-oriented leader. A stellar academic economist and 36-year Fed veteran with a particular focus on the human impact of unemployment, Yellen has said on many occasions that the last five years of crisis, joblessness and slower growth, “aren’t just statistics to me.”

While former Fed colleagues like Donald Kohn, Alan Blinder, and Larry Meyer cite her as among the most data-driven and analytical economists around, she’s also someone who’s more interested in clear, well articulated ideas with real world impact than creating the cleverest mathematical models. That commitment was partly inspired by her Yale mentor, the legendary liberal economist James Tobin, who argued that the first priority of economics was to improve the lives of real people.

You can bet that Yellen will be keeping that in mind as she slowly and carefully continues the paring back of quantitative easing that began in December. The challenge will be to keep both the markets and the economy steady as the central bank exits from the largest bout of unconventional monetary policy in history. While the Fed’s dual mandate of keeping inflation and unemployment low will be her first task, there’s currently no conflict there, since inflation is running far below the 2 % target that Yellen herself crafted, meaning that tapering doesn’t need to be rushed. She’ll also have her eye on banking reform. Blinder, who was the Fed vice chair back in the 1990s when Yellen was a governor, remembers speaking with her “many times about how the Fed was being too lax on regulation.” And since then he adds, “things have only gotten worse.”

To do all that, she’ll need to build consensus among a group of Federal Reserve governors who are increasingly independent. Fortunately, says Kohn, who worked with her as a Fed staffer in the mid 1990s, “Janet brings a CEO-type skill set to this job.” He and many others say she’s a “listener and a questioner” who likes to surround herself with the smartest people possible, hear out their arguments, challenge them on any weaknesses, then take her own decisions.

It’s a managerial strategy that seems to have worked, as Yellen has the best track record on policy predictions of any Fed leader since 2009. While she’s often characterized as the “nicest” big name economist around, no one should mistake that for a lack of spine. “She can get at the strengths and weaknesses of someone’s arguments so quickly,” says Berkeley professor and Haas School of Business colleague James Wilcox, “but so politely. She’s got that iron fist in a velvet glove quality.” It’s a quality that will likely serve her well as she steers the most important institute in America today towards a new era of monetary policy.


Sources: Bloomberg News, TIME, UCBerkley, Youtube

Federal Reserve Stopping Emergency Credit Market Programs

Federal Reserve to wind down several emergency programs


The Federal Reserve will allow several of its special programs supporting credit markets to expire early next year, winding down some of the unconventional efforts to prop up the financial system during the depths of the 2008 crisis.

The Fed said Wednesday, following a two-day policy making meeting, that it will allow five special lending programs -- designed to support money market mutual funds, short-term corporate lending and investment banks -- to cease to exist Feb. 1. It will also move to wind down special arrangements to pump hundreds of billions of dollars into other nations' banking systems.

It represents the clearest step yet by the Fed to return its policy to normal , though it continues its expansive effort to stimulate the economy overall. At the same meeting, the Federal Open Market Committee kept its target for short-term interest rates near zero, where it has been for a year, and said that it is likely to keep rates "exceptionally low" for "an extended period."

The Fed leaders implicitly acknowledged recent signs of economic improvement -- the unemployment rate ticked down in November, among other positive indicators -- even as they signaled that they intend to keep their foot on the accelerator to try to spur stronger growth.

Recent evidence suggests that "economic activity has continued to pick up and that the deterioration in the labor market is abating," said the Federal Open Market Committee in a statement following its final meeting of the year. "The housing sector has shown some signs of improvement over recent months."

The special lending programs being wound down were created over the course of 2008, using an emergency lending authority under which the Fed can lend to almost any entity in "unusual and exigent circumstances." Fed leaders have long known that they must eventually eliminate the programs, but they had repeatedly extended those efforts. Many of the programs have fallen into disuse as financial markets broadly have stabilized.

With the announcement Wednesday, the Fed indicated that there will be no more extensions for the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility and the Term Securities Lending Facility.

Another program, the Term Asset-Backed Securities Loan Facility, or TALF, is not scheduled to expire until March 31 for some parts of the programs and June 30 for others.

The meeting came at an unusual time for the Fed and for its chairman, Ben S. Bernanke. The central bank is under considerable fire on Capitol Hill for its actions during the crisis, and some lawmakers want to strip it of its power to supervise banks. And Bernanke is up for confirmation for a second four-year term as chairman, which the Senate Banking Committee is scheduled to vote on Thursday. Also Wednesday, Bernanke was named Time magazine's Person of the Year, for his expansive efforts to contain the financial crisis and the recession over the course of 2008.


Sources: Washington Post