Senators yesterday voted by 56 to 26 to approve Yellen’s appointment. She will be the first woman to chair the US central bank and is set to step up from her current role as vice-chair and replace Ben Bernanke on February 1.

Following the result, Obama said Yellen would help keep the US economy ‘growing for years to come’.

He insisted she would be a champion for the American people and use economic and financial policy to improve the lives, jobs and standard of living of workers and their families. 

‘As one of our nation’s most respected economists and a leading voice at the Fed for more than a decade – and vice-chair for the past three years – Janet helped pull our economy out of recession and put us on the path of steady growth,’ he said.

‘Janet is committed to the Fed’s dual mandate of keeping inflation in check while also addressing our most important economic challenge by reducing unemployment and creating jobs. And she understands that fostering a stable financial system will help the overall economy and protect consumers.’

Yellen’s appointment comes after the Fed announced on December 19 that it would begin to taper its monthly bond purchases, which are intended to support the US economy, this month.

The central bank’s Open Market Committee, which sets monetary policy, said it would reduce its purchases of US government debt from $45bn to $40bn each month, and cut purchases of mortgage-backed securities from $40bn to $35bn per month. 

This was in response to stronger employment growth, and analysts say Yellen will likely oversee further reductions. 

Prior to her confirmation, credit agency Standard & Poor's said it expected Yellen to maintain ‘a patient, gradual, and market-friendly approach’ to ending the quantitative easing provisions once she was in post.

Obama will now nominate someone to take Yellen’s post as vice-chair at the Fed. Former Bank of Israel governor Stanley Fischer is expected to be named for the post.