On Monday, the Senate broke with tradition and actually did something, confirming Janet Yellen’s nomination to head the Federal Reserve by a vote of 56-26. Yellen will be the first woman to chair the central bank when she replaces Ben Bernanke, who will step aside from his post later this month. It’s a victory for progressive groups, who pushed hard for Yellen’s nomination last year after word leaked that President Obama was intending to nominate the much-loathed Larry Summers instead. That plan was torpedoed by Senate liberals, and the president picked Yellen instead.
As Bustle reported, Yellen is overwhelmingly qualified for the post by almost any metric. Perhaps most importantly, she has an outstanding track record at predicting macroeconomic trends:
In May of 2007, Yellen sounded the warning bell with regard to the housing market, saying that “[t]he risk for further significant deterioration in the housing market, with house prices falling and mortgage delinquencies rising further, causes me appreciable angst.” Nobody really listened to her. That December, as the rest of the Fed was flatly predicting that a recession wouldn’t happen, Yellen was saying the opposite. “The possibilities of a credit crunch developing and of the economy slipping into a recession seem all too real,” she said at a Fed meeting in December of that year.
She was right. Her excellent predictive record isn’t confined to before the financial crisis, either: The Wall Street Journal conducted an extensive methodological analysis of over 700 predictions made by 14 Fed policymakers between 2009 and 2012, and Yellen came out on top.
But Yellen, who’s been the Fed’s vice chairwoman since 2010, received fewer votes than any previous Fed chair. That’s due largely to two factors: Republican opposition to Obama, which generally overrides any of the party’s ideological or policy concerns, and the fact that 18 Senators weren’t present for the vote, mostly due to severe weather conditions across the country. In the end, eleven Republicans joined Democrats to confirm Yellen. She’s expected to assume the post on February 1st.