The White House had clearly signaled that Yellen would be the nominee after Harvard professor Lawrence Summers, a former Obama economic adviser, withdrew his name from consideration last month.
Summers, whom people close to the White House said the president favored, decided to pull out after a vociferous reaction by liberal Democrats, who disliked his record on financial regulation and what they viewed as an uncivil style.
By contrast, Democrats were effusive about Yellen’s nomination.
“Today is a historic moment for the Federal Reserve, for women everywhere and for all of us who care about job creation,” said another banking committee member, Sen. Sherrod Brown (D-Ohio), who had advocated for Yellen. “Governor Yellen will work to prevent future bailouts, boost our housing markets and give the Fed’s mandate to maximize employment the attention it deserves.”
Since the 1990s, Yellen has alternated among jobs at the Fed, the White House and her academic home, the University of California at Berkeley. She was president of the Federal Reserve Bank of San Francisco from 2004 to 2010, when she warned about looming dangers in the real estate market and was a participant in the Fed’s crisis response.
Obama picked her to serve as Fed vice chairman under Bernanke. In that post, she has been a key force pushing Bernanke and the rest of the Fed to embrace more-aggressive policies to reduce unemployment.
Additionally, Yellen has been in charge of a major effort at the Fed for more transparency through clearer communications of the bank’s intentions and thinking.
A Fed chief has responsibilities beyond being the nation’s top economist — and there is no experience that can fully prepare someone for the role. The chairman must deftly navigate the questioning of lawmakers at hearings and the interrogation of reporters at Fed news conferences, while managing a policy committee of 19 officials who are often in disagreement with one another.
Most important, if history is any guide, Yellen will probably be called on at some point to be the first responder in a financial crisis — the toughest proving ground for any Fed chairman.
“Her experience as vice chair, and previously as president of the San Francisco Federal Reserve, makes her an incredibly qualified nominee,” said Sen. Jeff Merkley (D-Ore.).
Yellen, whose academic speciality focused on the labor market, also has worked at the London School of Economics and as a professor at Harvard, as well as serving as a staffer at the Fed in the late 1970s. She received an undergraduate degree from Brown University and a doctorate in economics from Yale University.
Yellen was born in Brooklyn and is married to Nobel Prize-winning economist George Akerlof. They have a son, Robert, who is also an academic economist.
Neil Irwin contributed to this report.