Janet Yellen looked very much the head of a major central bank that she is soon to be when she appeared before the Nov .14 U.S. Senate Banking Committee hearing on her nomination to succeed Ben Bernanke as chair of the U.S. Federal Reserve. She was poised, polished and in command of her brief. She demonstrated a central banker’s adroitness at deflecting pointed questions and at framing policy comments in such a way as not to say anything that was not already known.
Her remarks that her Fed would continue the Bernanke Fed’s stimulus until it was confident a durable economic recovery was in place that could sustain job creation, that its extraordinary asset purchase program would eventually have to be wound down but for now the benefits outweighed the costs, that the decision on when that would start would be driven by the economic data, and that interest rates will remain low even after tapering starts could all have come from of any of the public appearances made by Bernanke since last Spring. She is, of course, Bernanke’s vice chair and has been a Fed policymaker for a dozen years. That she is the candidate of continuity is scarcely a surprise.
Though she strongly defended the Fed’s ultra-easy monetary policy, Yellen didn’t get much by way of the expected hostile questioning from the Republican Fed-critics on the committee who say ultra-easy monetary policy risks inflating asset bubbles. In the event, they showed more interest in bank regulation than in monetary policy. They may have thought that a grilling would have come off as looking too much like bullying of the 67-year-old who is about to become arguably the most powerful woman in global finance. Or they just might have thought they would come off second best. Plenty of steel and smarts lies behind that calm charm — two other qualities essential in a central bank head.