By Richard Johnstone | 10 October 2013

President Barak Obama has nominated Federal Reserve vice chair Janet Yellen to head the organisation when Ben Bernanke steps down at the end of his term next January.

Yellen, who now faces confirmation hearings in the Senate, would be the first woman to chair the Fed.

Obama said Yellen had served in senior positions at the Fed for more than a decade, including the last three years as vice chair. She also served as chair of the Council of Economic Advisers during Bill Clinton’s presidency.

‘In government, Janet Yellen has been known for her sound judgment and ability to build consensus. As an academic, she made critical contributions to understanding how monetary policy can make a difference for jobs, growth and the lives of ordinary people,’ Obama said. 

Following Obama’s statement, IMF managing director Christine Lagarde welcomed the nomination. 

‘Janet is an excellent choice for this very important position. I look forward to continuing to work with her.’

Keith Wade, chief economist at asset managers Schroders, said Yellen’s nomination could delay plans to start tapering the Fed’s asset purchasing programme. 

Currently, the Fed buys $45bn of US government debt and $40bn of mortgage-backed securities each month to boost the US economy following the financial crisis. 

Wade said he had expected the quantitative easing taper to begin in December, but this could now alter.