President Barack Obama's decision to nominate Janet L. Yellen as head of the Federal Reserve Bank's Board of Governors was both timely and a good choice.
Ms. Yellen, 67, is highly qualified for the post, with years of varied experience relevant to the problems she will face. She has served as president of the Federal Reserve Bank of San Francisco, as a White House economic and financial adviser and as a professor at the University of California, Berkeley. She has been vice chair of the Fed since 2010.
If her nomination is confirmed by the Senate, as expected, she will serve at least a four-year term, following Chairman Ben S. Bernanke, who has had a difficult road to navigate since he was appointed by President George W. Bush in 2006. Ms. Yellen would be the first woman to lead the Fed, although women occupy other senior posts there, including Sandra Pianalto, president and CEO of the Federal Reserve Bank of Cleveland, whose area of responsibility includes Western Pennsylvania.
Another significant plus for Ms. Yellen is that she will represent continuity, having been Mr. Bernanke?'s deputy for three years. The Fed, like other American financial institutions, must be able to inspire national and international confidence at a time when the fiscal dogfight in Washington is causing consternation among bankers, investors and business leaders.
In appointing Ms. Yellen, the president had to forgo his initial preference for financial authority Lawrence H. Summers. The former Harvard president withdrew from the running last month in the face of stiff opposition from Democratic senators and others. Criticism of Mr. Summers stemmed, first, from what was considered to be his close identification with Wall Street bankers and, second, from a reputation for sexism toward women that he acquired while at Harvard.
As Federal Reserve chair, Ms. Yellen will find herself face-to-face with the severe dilemmas confronting America's economy and society. Apart from the nonsense in Washington, the Fed is in the process of deciding whether the $85 billion per month it has been pouring into the economy in the form of quantitative easing should be ended, or at least reduced, and how the twin but sometimes incompatible goals of job creation and inflation restraint can be achieved, with Fed-influenced interest rates a key element in the package.
The problems are formidable, but Ms. Yellen is capable of tackling them effectively. The Senate should not dally in approving her nomination.
First Published October 9, 2013 8:00 PM