SHE’S set to be the most powerful woman in the world, responsible for shaping monetary policy in the $17 trillion US economy.
But unless you’re an economics buff, you’ve probably never heard of her.
Janet Yellen has just been named the next chair of the US Federal Reserve, making her the first female to hold the top spot in the 100-year history of the organisation. Here’s all you need to know about her.
She is extremely qualified for the job
Ms Yellen, 67, currently serves as vice chair of the Federal Reserve under Ben Bernanke, a position she took up in October 2010.
She has a huge amount of economic and political experience, having previously served as president and CEO of the San Francisco Federal Reserve Bank and chair of the Council of Economic Advisers under President Clinton.
She’s also been chair of the Economic Policy Committee for the OECD, a member of the Council of Foreign Relations and American Academy of Arts and Sciences. Before that she was a professor of business and economics at University of California Berkeley, and is regarded as a specialist on a wide variety of macroeconomic issues including unemployment.
Ms Yellen was born and raised in Brooklyn, New York to a Jewish family and studied economics at Brown University and Yale. Her husband George Akerlof is a Nobel prize-winning economist and they have one adult son. Oh, and a stamp collection estimated to be worth about $50,000.
She beat three others for the job
Ms Yellen was the favourite for the spot after the withdrawal of Larry Summers, who served as director of the National Economic Council for the Obama administration.
She’s extremely qualified for the job, with more experience than Bernanke and previous chief Alan Greenspan than when they took up positions at the Fed, The Washington Postreports. More than 450 economists signed an open letter backing her appointment.
She beat three main other contenders including:
• Donald Kohn, 70, who served under former chairman Alan Greenspan and retired in 2010.
• Timothy Geithner, 52, the treasury secretary under Obama’s first term who has held senior positions at the IMF and under President Clinton in the past.
• Roger Ferguson, 61, who currently runs TIAA-CREF, which manages pension funds for schools and hospitals and served as vice chair of the Fed from 1999-2006.
She’s in for a tough job
Generally, the role of the Fed is to keep inflation low, employment rates high and prices steady, as well as supervising and regulating the banking industry to ensure stability and protection for customers.
Chairing the Federal Reserve is perhaps the toughest economic management job around, as it involves charting the course for monetary policy for the world’s biggest economy, at one of the most difficult times in US history.
She will have to delicately balance the tapering of stimulus measures with maintaining enough support for the economy, with the added responsibility of knowing actions in the US affect markets in every country around the world.
She will also have to contend with any potential fallout from the current government shutdown and the potential of an unprecedented default in the US economy.
She’s likely to focus on tackling unemployment
Ms Yellen is widely expected to have a similar management style to Mr Bernanke, that is, prepared to keep monetary policy “highly accommodative” until the economy shows signs of genuine recovery.
As leader, we can expect her to focus on driving down unemployment, currently at 7.3 per cent, and keeping interest rates low, according to a speech she made earlier this year. Her appointment is also likely to reassure markets that the Federal Reserve would not withdraw the stimulus they have provided to financial markets too drastically.