President Obama Fed Chair Nominee Faces Senate Banking Hearing

Janet Yellen answers questions in effort to succeed Ben Bernanke as head of Federal Reserve.
15:35 | 11/14/13

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Transcript for President Obama Fed Chair Nominee Faces Senate Banking Hearing
This is a special room. I'm -- Hernandez that his ABC news digital special report confirmation hearings are under way. Federal chair reserve vice chairman. Janet Yellen is appearing this morning before the senate banking committee -- expected to be quickly confirmed as the new Fed Chairman replacing Ben Bernanke. When he steps down at the end of January. Joined from Capitol Hill by ABC news senior Washington correspondent -- felony and from the White House. -- -- our senior ABC news White House producers so these confirmation hearings are often. Very rocky what are expectations here with Janet Yellen let's start with Mary. Actually the first time that Janet Yellen will be able to being grilled by these senators up on Capitol Hill -- interest to see how she handles it -- certainly has 88 -- extreme amount of experience has been the vice chairs you mentioned that the Fed for three years was -- a professor of Berkeley before that. But it this is a person actually on -- hot seat and to see how she responds how she acts on her feet to some of this -- it really be interesting to see. And -- Janet Yellen is in Saturday you know. A radical figure she's someone who is well known within the Fed already. Will we expect do we expect any strong opposition at this hearing today. Sure -- we do expect opposition any confirmation any nomination process at this point of a second term of the presidency. Is to be expected but on something as critical as economic policy. Monetary policy we expect many tough questions and in fact some Republican senators are already threatening to put a hold on her nomination. That means that only once it only takes one senator to. Holder nomination Rand -- is one of those senators he is saying that he wants to use this as an opportunity to call for a new audit of the Fed. Senator Ted cruises saying that he may put a hold on her nomination senator Lindsey Graham is starting to put a hold on all Obama nominations right now on a totally unrelated matter of Ben Ghazi so. Any high profile nomination like this is going to run. Across several erode -- but. In terms of the at the end of the day I agree with Mary I think that we'll see how she does on the growing but it's likely she will be confirmed someone needs to lead the Fed but. We -- really going to see a reexamination. Of all these Bernanke. A policy is that the Fed over the past several years. And she is largely. Passing is continuing those policies so a deep examination of of what the federal -- has done will do going forward so this is not an easy road for her at least in the short term. And Jeff when you talk about those were looking to put a hold on her nomination is that coming that would happen today procedurally or -- -- and now it would happen down the road she's appearing today before the senate banking committee. And we will get a sense of the how she handles but also the tone of Republicans going -- if all Republicans are going to sort of hold them. Fast and and and trying to oppose her nomination which we don't expect but -- hold. Would come. When the full senate is voting for this on the senate floor they can be filed at any time so we'll know more as this sudden goes forward here. But. -- really needs confirmation hearings we look -- at how her demeanor is how her tone is. And how most Republicans. Are reacting. To her but and this is not going to happen -- today her confirmation will not happen today. Okay now marry. We have. A statement that. Janet Yellen is going to make we have these prepared remarks in advance we often have that in terms of confirmation hearings but is it. Particularly sensitive since we're talking about Wall Street and they listen very carefully. -- just to every word but every facial expression. That these fed chair or fed chair candidates make. Janet Yellen is known for being meticulously well prepared and she certainly is acutely aware that anything she says has the potential. To be interpreted on the markets to change the way the markets will react and -- I suspect that she has awarded her statement. Very carefully going forward it's really going to be the questions that come after and how she responds to those as Jeff Sessions this is really a chance for Republicans to -- her about. Every grievance they have what with Bernanke's policies with the administration's policies -- for the chance attempted to voice those grievances and also see how she'll handle them going forward but I suspect she will be very careful in the way she -- -- -- And marry if she gets the job this is I think she'll have to do often the Fed chair. -- Testifies at least -- -- year in a marathon appearance. Before the house and Senate Committees so. This coming she's gonna have to get used here. Absolutely this is something she'll have to do fairly often that's interesting there's two different kind of schools of thought here when it comes to how the Fed chair addresses things in public Greenspan tended to be a little bit -- More couched in his response has Bernanke really tried to explain things very clearly and carefully as we mentioned Janet Yellen has the history of being a professors I suspect that she'll try to put things out there is clear and and concise the matter is possible. And it annoys of course keeping -- and the fact that the markets are always listening. -- -- week we hear a lot about. The -- when -- that fed gonna start tapering its bond buying program Wall Street is is terrified of that scenario is that aren't democratic Republican divide on the issue of when to taper. When there is a bit of a divide on this and not all gets to the heart of the question of does the economy still need help is the economy still. I'm. Is it functioning on its own is it healthy enough to function on its on the that doesn't need for -- boost from the Federal Reserve and we'll -- some of the answers to those questions I'm. Her prepared it has -- is not addressing. This so directly but Mary is absolutely right in the question and answer session that's where we -- more here so. Democrats and Republicans are not in one view on this. Amid all it could definitely stands -- party so wall sort of maybe get a hint on the direction of the -- I wouldn't expect too much -- mean. The Fed keeps -- it's a decisions closely held Janet Yellen is not going to make some announcement today before the senate banking committee and member. -- it's going to do anything to upset the markets. All right so Janet Yellen very much expected to play it safe not just in her comments which again we we've already seen but marry in her answers as well. It no matter how tough the question she's got a hold a very com home. Demeanor here. Absolutely she is this chants were heard -- Defense some of the action she's taken in the past and -- her view of policies going for it. As we mentioned Republicans will likely bring up all of the issues -- they do have grievances with the policies of federal chairman Ben Bernanke including. Dodds frank transparency issues of stimulus I think those are the topic areas where you really gonna hear her being grilled. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Gonna go now to the senate banking committee. Like introduced my idea that's been -- -- -- -- -- -- -- -- -- and fruits and my friends in the former San Francisco fed. Director -- -- chambers you're with me today. Chairman Johnson. Senator Craig -- and members of the committee. Thank you for this opportunity to appear before you today. It's been a privilege for me to serve the Federal Reserve. At different times. In a different roles. Over the past 36 years. And an honor to be nominated but the president to lead the fit is chair of the board of governors. I approach this -- -- with a clear understanding that the congress. Has entrusted the Federal Reserve. With great responsibilities. Its decision to -- the well being of every American. And the strength and prosperity of our nation. That prosperity depends most of course on the productive -- an enterprise -- the American people. But the Federal Reserve -- to -- to. Promoting conditions that Foster maximum employment. -- wind stable inflation. And -- safe and sound financial system. The past six years have been challenging for our nation. And difficult for many Americans. We in -- -- the worst financial crisis didn't deepest recession since the Great Depression. The fix we're severe. But it could have been for worse. Working together. Government leaders confronted these challenges. And successfully contain the crisis. Under the wise and skilled leadership of chairman Bernanke the -- help stabilize the financial system. -- risk the steep fall in the economy in restart growth. -- The private sector is created seven point eight million jobs -- post crisis. Low for employment when he TM. Housing. Which was at the center of the crisis. Seems to have turned -- corner. Construction home prices and -- -- up significantly. The auto industry is made an impressive comeback. With domestic production and sales -- -- -- their pre crisis levels. We've made good progress. We have further to go to -- -- the Graham lost in the crisis and the recession. Unemployment is damp from the peak of 10%. But it's seven point 3% in October. It is still too -- Reflecting the labor market economy. Performing for a short -- their potential. At the same time inflation is running below the Federal Reserve's goal of 2%. And is expected to continued to do so for some time. -- -- reasons the Federal Reserve is using its monetary policy tools. To promote a more robust recovery. Is strong recovery will ultimately in Naples -- -- to reduce its monetary accommodation. And it's -- reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today. It's the surest pay after returning. To a more normal approach to monetary policy. In the past two decades. And especially under chairman Bernanke. The Federal Reserve has provided more. And clearer information -- -- its goals. Like the chairman I strongly believe that monetary policy is most effective when the public understands. What the fit is trying to -- And -- -- plans to do it. At -- -- chairman Bernanke I've lived here for -- -- adopted statement of the federal open market committee's. Longer run objectives. Including -- 2% goal for inflation. I believe the statement his -- -- clear and powerful message about the FOMC's commitment to which goals. And she's helped anchor at the public's expectations. That inflation will remain low and stable in the future. In this and mini -- to raise the Federal Reserve has become a more open and transparent institution. -- strongly supported this commitment to openness and transparency. And I will continue to do so if I'm confirmed and served as chair. The crisis revealed weaknesses in our financial system. I believe that financial institutions. The Federal Reserve. And Arafat -- -- regulators. Have made considerable progress in addressing those weaknesses. Banks are strong -- today. Regulatory gaps are being closed. And the financial system is more stable and more resilient. Safeguarding the United States in the global financial system requires high your standards. Both here and abroad. -- the Federal Reserve -- after regulators. Have worked with our counterparts. Around the globe. To secure improved capital requirements. And -- reforms internationally. Today. Banks hold more and higher quality capital and liquid assets. They leave the much better prepared to withstand financial turmoil. Large -- are now subject to annual stress tests. Designed to ensure that they will have enough capital. To continue. To continue to fight a role -- in the economy. Even under highly adverse circumstances. We have made progress in promoting a strong and stable financial system. But here too important work license yet. I'm committed to using the -- supervisory. And regulatory rural. To reduce the threat that's another financial crisis. I believe -- capital little liquidity rules. And strong supervision. Are important tools for addressing the problem of financial institution sticker regarded as too big to fail. In writing new rules -- -- -- for the -- should continue to limit the regulatory burden for community banks. And smaller institutions. Taking into -- camp veered distinct role and contributions. Overall the Federal Reserve he sharpened its focus on financial stability. And is taking that -- into consideration. When carrying out its responsibilities. For monetary policy. I support these developments. And play H if confirmed to continue them. Our country has come a long way since the dark days of the financial crisis. But we have fought her to go. I believe that -- for resurfaced made significant progress. Toward its goals. But has more work to do. Thank you for the opportunity to appear before you today I would be happy to respond to your questions. Thank -- You've just been watching the opening remarks -- fed chair contender Janet Yellen before the senate banking committee. Her testimony will continue and will continue to stream it live right here. On abcnews.com. But for now on -- Hernandez in New York this has been an ABC news digital special report.

This transcript has been automatically generated and may not be 100% accurate.

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