|File photo shows Vice Chairwoman of the U.S. Federal Reserve (Fed) Janet Yellen testifying during her nomination hearing to chair the Federal Reserve before the Senate Banking Committee on Capitol Hill in Washington D.C., capital of the United States, Nov. 14, 2013. (Xinhua Photo)|
Janet Yellen won approval from the U.S. Senate on Monday to head the Federal Reserve, becoming the first woman to lead the U.S. central bank in its 100-year history. She is to replace outgoing Fed Chairman Ben Bernanke, whose term ends this month.
Yellen served as an economist with the Federal Reserve between 1977 and 1978. From August 1994 to February 1997, she served as a member of the Board of Governors of the Federal Reserve. Yellen took office as vice chairwoman of the Federal Reserve in October 2010. Prior to this, she has served as president and chief executive officer of the Federal Reserve Bank of San Francisco.
Although Yellen boasts an impressive CV, she will still face unprecedented challenges if she is to achieve goals such as protecting the interests of the American working class and consumers, maintaining the stability of the financial system, and realizing continued growth in the U.S. economy in the coming years.
The first key challenge will be choosing the right time to begin the Fed's withdrawal from its quantitative easing policy, and correctly judging the rate of withdrawal.
The second will be in increasing the jobs supply in the US economy while keeping inflation stable and giving the market confidence in the Fed's short-term interest rate strategy.
The third will be how to build consensus in the face of the bickering to which the Federal Open Market Committee is prone. Once Yellen is in office, whether the U.S. economy is performing in line with expectations or poorly, there are likely to be differences of opinion among committee members with regard to the timing of debt reduction and the scale of measures taken.
The fourth will be how to improve public communication skills and present the Fed's policy effectively to the market, Congress, and the public.
The fifth will be how to define her own style of governance and establish her credibility and reputation.