Janet Yellen: married to economics Nobel prize winner and mother of economics professor

Janet Yellen, whom President Barack Obama is poised to pick Wednesday to lead the Federal Reserve, is likely to keep the US central bank on the track mapped out by Ben Bernanke.

The liberal economist sits smack in the middle of the Fed “doves” — those focused on stimulating the
economy back to full employment and, not yet at least, worried about the specter of easy money sparking uncontrollable inflation.

Following months of speculation, Obama is set to formally nominate Yellen in the East Room of the White House at 1900 GMT Wednesday, an administration official said.

Obama chose Yellen to replace Bernanke as Fed chairman over his putative favorite, Larry Summers, amid signs of tough resistance to the former White House economic advisor in Congress.

But Yellen will also draw opposition in Congress, mainly from conservatives who think the Fed has been too profligate with the country’s money supply and that Yellen would stick to that pattern.

Yellen, 67, would be the first woman ever to lead the US central bank.

But she has spent more than a dozen years altogether at the Fed, starting as an economist, in the 1990s doing three years on the board of governors, and from 2004-2010 as head of the Fed’s San Francisco branch.

Since 2010 she has sat next to Bernanke as vice chair of the Fed, and also serves on the policy-setting Federal Open Market Committee (FOMC).

Married to economics Nobel prize winner George Akerlof, and mother of economics professor Robert Akerlof, New York-born Yellen studied economics at Brown University and then Yale, where she earned a doctorate.

She has been a professor at Harvard and, more recently, at the University of California, Berkeley, where her husband also teaches and conducts research.

“The truth is,” she once told an interviewer about the family’s focus, “if you spent an evening at our house you would probably hear economics discussed over the dinner table.”

“You would eat a diet that is richer in discussions of economics and policy issues than many people would find appetizing,” she said.

Yellen has been close to the Democratic party power center at least since the 1990s. Then-president Bill Clinton tapped Yellen for the Fed board in 1994 and named her to his Council of Economic Advisers from 1997-1999.

At the time she was elevated to Bernanke’s deputy in 2010, she was assailed for not having forseen the economic crisis that hit the region under her watch at the San Francisco Fed especially hard.

Western states like Nevada and Arizona, and parts of California, were devastated by the implosion of the property market.

While in 2007 she had warned of possible recession, she candidly admitted, in testimony to a congressional committee in 2010, that she didn’t anticipate how bad things could get.

“For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system… I didn’t see any of that coming until it happened.”

It is not her first time up as a possible Fed chair. In 2009, when Bernanke’s first term was about to expire, her name was floated as a successor. But with the economy still in deep straits, Bernanke stayed on.

Since then, she has been one of Bernanke’s closest allies on the FOMC, helping keep the Fed’s policy focus on the high unemployment rate rather than the potential threat of inflation.

“Reducing unemployment should take center stage,” she said.