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Yellen's one step closer to Fed helm

Thursday, November 21, 2013 - 02:19

Nov. 21 - The U.S. Senate Banking Committee gives Yellen's nomination as the next Fed chair the thumbs up. What's next? Jeanne Yurman reports

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A giant step for Janet Yellen toward becoming the next chair of the Federal Reserve. Largely breaking down between party lines, the U.S. Senate Banking Committee, voted 14 to 8 in favor of the central bank's current number two to succeed Ben Bernanke, who retires at the end of January. She is seen as even more dovish than Bernanke. But many fellow economists like Decision Economics', Cary Leahey, say Yellen is apt to be somewhat of a Bernanke 2.0. CARY LEAHY, CHIEF U.S. ECONOMIST, DECISION ECONOMICS (ENGLISH) SAYING: "I don't expect much difference but perhaps Yellen will be a little clearer about the commitment to low interest rates than Bernanke has. Bernanke, in some sense, a bit stepped in it a bit last summer when he announced tapering when no one expected it in May and then when everyone expected it to come in September it didn't happen." The next and final stop is now a vote by the full Senate, likely in December. Odds lean in favor of her being confirmed with Democrats controlling 55 of the 100 votes at stake. New Senate rules require only 51 votes for confirmation. Still she faces major resistance. Prominent Republican Marco Rubio said Thursday he'll vote no on and fellow Republican, Rand Paul, is using the vote to get congressional oversight of the Fed. RAND PAUL, UNITED STATES SENATOR (R-KY) (ENGLISH) SAYING: "I plan to slow it down as much as possible and in the old days you could hold things forever. You can't quite do that now. They'll overcome you if they get 60 votes. But in all likelihood they probably will, but I think there need to be some questions answered." Rubio and Paul are amongst the critics of the easy money policies Yellen supports. As are many on Wall Street like Bonnie Baha of Doubleline Capital. BONNIE BAHA, FIXED INCOME MANAGER, DOUBLELINE CAPITAL (ENGLISH) SAYING: "The program has been an abject failure with respect to promoting underlying growth in the U.S. economy which was really the goal. What the program has accomplished is an inflation in asset prices and really its been very helpful to corporations in refinancing debt, taking on new debt, shoring up corporate balance sheets." While there are Yellen detractors, the Fed's vice chair scored welcome support this week ahead of the Senate vote from Republican senators Bob Corker, Tom Coburn and Mark Kirk.

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Yellen's one step closer to Fed helm

Thursday, November 21, 2013 - 02:19