Yellen’s Confirmation: Doves Rule the Roost at the Federal Reserve

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The U.S. Senate voted 56-26 on Monday to confirm Janet Yellen as the next chair of the Federal Reserve. Yellen will assume office as the 15th chair of the central bank on January 31, when current Chair Ben Bernanke concludes his second term. She will be the first female to lead the Fed, and will join a small pantheon of top female central bankers from around the world.

With the confirmation, the conversation surrounding monetary policy in the U.S. has shifted toward Yellen and how she will lead the decision-making process at the Federal Reserve. The institution has generally leaned toward the dovish side of the spectrum in recent years, but the historic line dividing monetary policymakers lost some of its divisive power in the wake of the financial crisis.

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With inflation running low even in the face of massive and ongoing quantitative easing, and with unemployment stubbornly high, the doves ruled the roost at the bank. Over the past 12 months, in particular, there has hardly been any inflationary pressure to worry about at all. The price index for personal consumption expenditures increased just 0.9 percent on the year in November. In May, Bernanke even warned about “incipient deflationary pressures” held at bay by the Fed’s accommodative monetary policy.

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