Putting a bigger stamp on the Federal Reserve, President Barack Obama on Thursday chose Janet Yellen as vice chairwoman of the central bank and filled two other vacancies on the board, which has enormous power over Americans’ pocketbooks.
The nominations are subject to Senate approval. If the Senate confirms all three nominees, Obama will have appointed five of the seven members of the Federal Reserve Board.
His moves come as the Fed, whose decisions influence economic activity, employment and inflation, is facing political and economic challenges.
The Fed is steering the economy out of the worst recession since the 1930s, and legislation to overhaul the financial system would eliminate some of the Fed’s authority while giving it new responsibilities. Some lawmakers think the Fed overstepped its authority by bailing out some big financial firms during the 2008 financial crisis.
Fed interest rate decisions affect the rates consumers pay on home mortgages and other consumer and business loans. On Wednesday, the Fed ended a two-day meeting by sticking to its pledge to hold rates at historic lows for an “extended period” to help energize the recovery.
Yellen is president of the Federal Reserve Bank of San Francisco. As vice chair, the second-highest ranking Fed official, her duties would include helping build support for policy positions staked out by Fed Chairman Ben Bernanke, who has begun a second term.
Obama also nominated Sarah Raskin and Peter Diamond to the Fed board. Raskin is the Maryland commissioner of financial regulation. Diamond is an economist at the Massachusetts Institute of Technology.
