Yellen picked as Fed's first female chair

President Obama's choice to be the next chair of the Federal Reserve would be the first woman in the job. She would also be the third Yale graduate.

Yesterday, Obama nominated Janet Yellen ’71PhD to succeed Ben Bernanke as Fed chair when his eight-year tenure ends. Yellen has served as vice-chair of the Fed since October 2010, and rumors that Yellen would secure the president's nomination to chair the Fed have been percolating since the spring, when a Wall Street Journal poll of 38 economists found that 29 believed Yellen would get the job.

At the announcement of Yellen's nomination, Obama said Yellen was "renowned for her good judgment," according to the New York Times. Obama praised Yellen for realizing early on that financial and housing bubbles would cause the recession in 2008. 

Since her days as a doctoral candidate in the economics department, Yellen has been heavily involved in Yale life. She served as an alumni fellow on the Yale Corporation from 2000 to 2006, a job she described to the Yale Daily News in 2002 as being a major professional commitment.

Yellen wrote her doctoral dissertation under James Tobin, and many economists think Tobin was a powerful influence on Yellen's views on economic policy. A 1981 Nobel prizewinner in economics, Tobin championed the idea that central banks can help lower national unemployment rates. In the News's 2002 obituary for Tobin, Yellen described her longtime mentor as one who pushed his students to produce "work that would not only meet a high intellectual standard, but would improve the well-being of mankind."

According to a 1997 article published in Business Week, Yellen was such a diligent disciple of Tobin's that her extremely detailed and exhaustive notes for one of the professor's courses circulated among generations of graduate students. The "Yellen Notes," as they were called, became a de facto textbook for Tobin's class.

''She has a genius for expressing complicated arguments simply and clearly,'' Tobin told Business Week.

Those other two Yalies to lead the Fed? It was a while back. Eugene Meyer, Class of 1895, was at the helm from 1930 to 1933, and William McChesney Martin ’28 was the longest-serving chair, from 1951 to 1970.