Change and Continuity
By Isaac Cohen*
On January 31, 2014, there will be change of helmsperson at the Federal Reserve. President Barack Obama has nominated Ms. Janet Yellen, currently the Vicechairperson of the Federal Reserve, to succeed Mr. Ben Bernanke. If confirmed by the US Senate, Ms. Yellen will be the first woman ever to become the most powerful banker in the world.
Last week, the confirmation process started with the testimony presented by Vicechairperson Yellen to the Senate Committee on Banking, Housing and Urban Affairs. In her testimony, Ms. Yellen described the central bank’s three functions as promoting maximum employment, with low and stable inflation and a safe and sound financial system.
In her review of recent experience, Ms. Yellen recognized that exercising these functions, under the guidance of Chairman Ben Bernanke, the central bank was able to stabilize the financial system, arrest the steep fall in the economy and restart growth.
On current economic conditions, Ms. Yellen said “we have made good progress, but we have farther to go to regain the ground lost in the crisis and in the recession.” Therefore, with unemployment at 7.3 percent still too high and inflation below the central bank’s goal of 2 percent, monetary policy is promoting a more robust recovery. Pointing toward continuity, Ms. Yellen said she believes “supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”
*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC Washington Office.