Maggie: A week dominated by budget battles and a shutdown showdown didn’t stop President Obama from making a key announcement yesterday. Shelby Holliday has the story of a historic nomination.
Shelby: Janet Yellen is on her way to becoming the first ever chairwoman of the Federal Reserve.
Janet Yellen: Thank you, Mr. President. I’m honored and humbled by the faith that you’ve placed in me.
Shelby: It is a job that has been dominated by men throughout the bank’s 100-year history, and a role that can greatly impact the U.S. economy.
President Obama: He or she is one of the most important policymakers in the world.
Shelby: So what exactly does the Federal Reserve do? Well, as the central bank of the U.S., its main functions are to keep the economy going and to guard against inflation. That is when the prices of goods and services rise faster than the amount of money available. The Federal Reserve is also in charge of regulating the banking system.
Policies and decisions made by the Fed can boost employment, stabilize prices and set interest rates to stimulate or slow growth. But the Fed’s decisions aren’t always seen as positive. Critics say that low interest rates helped contribute to the recent U.S. housing crisis and that ongoing efforts to stimulate the economy could lead to higher prices and instability later on.
Yellen, who is currently the Fed’s vice chairman, has strong support from Democrats. If confirmed by the senate, she will replace her boss, current Fed Chief Ben Bernanke, when his term ends on January 31st.
Alan Valdes: She probably is either the first or second most powerful woman in the world because she controls the pocketbook. She controls the purse.
Shelby: Shelby Holliday, Channel One News.
Maggie: Not only is Yellen the first woman to ever lead the Federal Reserve, she is also the first Democrat to hold this position since 1979.