Transcript for President Tries to Crack Glass Ceiling With Fed Chair Nod
This is a special room. Hello I'm damp -- -- New York with a CBC news digital special report for the first time ever the person in charge of America's money could be a woman. President Obama. Is nominating the current vice chair the Federal Reserve Janet Yellen to that top spot. And of course the president will be making that announcement in just -- few moments at the state dining room at the White House but for right now wanna bring ABC's paper is standing by outside the White House and lower analysts -- from Yahoo! finance thank you both for joining us today. Mary I want to go to you first because President Obama obviously breaking gender barriers here but also party barriers right. Absolutely this Janet Yellen is going to be named as the president's pick -- to chair the Fed reserve. Breaking one of the highest glass ceilings that remains -- now be on the top woman to serve anywhere. In Western Hemisphere. In terms of when it comes to economic policy. But she is also the first Democrat to be appointed to the position in over thirty years and keep in mind that she was not thought to be the president's first pick for this position. She it became the topic after the president's initial first -- former Treasury Secretary Larry Summers took himself out of the running. But now of course we expect that she will be confirmed and the president going to be announcing her shortly here at the White House. Right exactly and as you can see we are waiting there for the president take the podium there on current fed chair Ben Bernanke is expected to be attending this afternoon's announcement along with -- -- Janet -- a good -- I want talk a little about the timing of this announcement is obviously were eight days into the budget showdown shut down. Com is the White House what kind of strategy behind -- The timing I would suspect is not a coincidence as you remember the president was originally supposed to be in Asia this week attending to -- -- On the other side of the world but now do the government shut down of course he's here in Washington in this court gives him an opportunity. To come out and show that despite a government shutdown he is moving forward sending a strong economic message with this pick today. And nine days into -- I stand corrected on that -- -- what -- you went to this because obviously the role of the Federal Reserve has certainly changed dramatically over the last couple of years. Yet what we see -- an undertaking an unprecedented monetary policy that we've never seen before with the Fed's massive bond buying program. To the tune of 85 billion dollars per month which is attempting to stimulate the economy and -- get unemployment lower. To boost growth. -- and what you have also is a lot of concerns and out -- -- could go we will now. Get back to -- to meadow lark the first of that under the president. We're. -- -- Created. Seven point five million new jobs. Our housing market is rebounding. Manufacturing point. The auto industry has come roaring back and since I took office we've cut the deficit. I think are very -- -- a lot of work to do rebuild. The middle class but we've made progress and we shouldn't do anything to threaten that progress for these hard won games. And made -- difference to millions of Americans and in part we can thank. The extraordinary grit resilience the American people. In part we can thank the dynamism more businesses. A lot of also through the choices we made as a nation to create more jobs more growth. And one of the most important contributors to this whole process. Has been the Federal Reserve under the strong leadership -- Burnett. For nearly eight years. -- has -- the Fed through some of the most daunting economic challenges for a lifetime. For some time now he's made it clear that. He intends to finish the services chairman at the end of this for -- -- -- So today I just want to take a minute to pay tribute event for his extraordinary service. But I also want to announce my choice for mixture. Of federal -- -- One of the nation's foremost economists. And policy makers for vice chair. -- -- You know after I became president. I was proud nominate them for a second term. And while the Fed is and must always be independent. I want you -- and I personally Mercury. For being such a strong work in helping America recover from recession. Perhaps no surprises the son of a pharmacist and his schoolteacher that Denver rocky is the epitome -- call. And against the volatility of global markets he's been a voice. Of wisdom. And a steady him. The same time when faced with potential global economic meltdown he has displayed tremendous -- -- He took bold action that was needed to avert another depression. Helping us stop the free -- stabilize financial markets. Short of our banks. Get credit flowing again. In all this -- made a profound difference in the lives of millions of Americans. A lot of people aren't necessarily sure -- feature films were but thanks to this man. The left of me. More fairways -- -- before their own home -- small businesses are we get loans to expand our workers. More folks can pay their mortgages and car loans. -- -- -- -- And more jobs. And -- have been wearing his commitment to greater transparency and clear. He's also allowed us to better understand the -- of -- threat. You know that has. Led a new -- that speak. And been a little more clear about how the system works and that. Is good for democracy. And I have to tell you if I travel around the world. Get the job of the picture. Is is not just. -- -- -- Monetary. Policymakers. The world looks to -- American -- for leadership guts and the degree to which -- is admired and respected. And the degree which. No central bankers all across the world. Look to him for sound advice and Smart policy making -- remarkable he has truly have been -- stabilizing force not just for our country but for the entire world. And I could not be more grateful for exporters are so -- -- -- and your wife and children drove Melissa. -- -- -- Now that's. The decision on who will succeed Ben as one of the most important economic decisions that'll make its -- One of the most important. Appointments that any person -- Because sure the Fed is -- most important policy makers in the world and the mixture will help guy that our economy after I left office. Considered a lot of factors. Foremost among them is an understanding of the Fed's dual mandate. Sound monetary policy to make sure that we keep inflation in check. But also. Increasing employment and creating jobs which remains. Our most important economic challenge right. And I've found -- follies congenital. She's a proven leader. And she's I just because she's -- Janice exceptional well qualified for this role. She served in leadership positions of the -- for more than a decade. As vice chair for the past three years she's been exemplary. Driving force policies -- help boost -- economic recovery. You know Janet is renowned for her good judgment she sounded you are probably about. The housing bubble about excesses in the financial sector and about the risks of a major recession. She doesn't have a crystal ball but what she does have is keen understanding about how markets and the economy. Not just in theory but also in the real world and you -- like she sees. General who knows how to build consensus. She listens to competing views brings people together around a common goal. And as one of her -- says she's the kind of person who makes everybody around her -- Not surprisingly she is held in my history my colleagues across the country and around the world who look to the United States -- -- and defense -- leadership. -- committed to both sides of the -- moment she understands this suvs stable financial system. Where we move ahead with the reforms that we've begun. To protect consumers to ensure that no institution is too big to fail. And make sure the taxpayers are never again help but holding the bag because mistakes. The reckless -- Stay the same time she's committed to increasing employment she understands the human costs when Americans can't find -- job. She said before -- are not just statistics to me the tolls simply terrible mental and physical health workers. On the marriages on their children. So -- understands this and America's workers and their families -- have -- campaign champion. And Janet hill so again tonight. Thank you for taking on this new assignment. Given -- an economic challenge facing our nation I -- The senate to confirm -- without the life perhaps more confident that she will be an exceptional. -- of Federal Reserve. I should -- -- -- first woman to lead the Fed in its 100 years. And I know a lot of Americans men and women thank you -- -- example. But also capable model for. It's -- -- -- found love those are literally ms. Murphy. This is where she -- to. Her husband George celebrated economist in his own right. And their son Robert as an economist as well so you can imagine the conversation around -- table might feel differently. -- -- In fact I've been told variety -- -- verification. Is the beach with a suitcase full economics books. But this is a family affair we thank George Robert where the supporters -- against -- during. Again I want to thank Ben Bernanke for the outstanding work he's done and obviously -- continue to. Help. Keep our economy moving forward during the remainder of his tenure here so we'll probably have. Occasion for additional supplies. And I know Janet is very much. Counting on him to give us some good advice from her -- as she moves into the -- -- -- -- Like to -- just. Thank you Mr. President. I'm honored and humbled by defeat because of placed in me. If confirmed by the -- and -- pledge to do my utmost to keep that trust. And -- degree responsibilities. That congress is entrusted to the -- police here. To promote maximum employment. Stable prices and -- strong and stable financial system. I'd also like to thank my stamps George and my son Robert. I couldn't imagine taking on this new challenge without -- of weapons support. Six years didn't tumultuous that the economy. In challenging for many Americans. Well I think we all -- mr. precedent that more needs to be done to -- from the recovery. Particularly for those hardest hit by the pre recession. We have made progress. The economy is stronger. And the financial system -- As she said mr. -- considerable credit for that goes to chairman Bernanke. For his YS. -- Regis and skillful leadership. It has been my privilege to serve with him and learn from him. Well we have made progress. We have fought for -- to go. Demanding the Federal Reserve is to serve all the American people. -- And too many Americans still can't find a job. And worries -- they'll pay your bills. And provide for your families. The Federal Reserve should help it it does its job effectively. We can help ensure that everyone has the opportunity. To work hard and build a better life. We can ensure that we inflation remains in check. In doesn't undermine the benefits of -- growing economy. We can -- must safeguard the financial system. The -- has powerful tools to influence the economy in the financial system. But I believe it's created sprint wrist -- its capacity to approach. Important distinctions. With expertise. An objectivity. Two feet high -- to -- to first used. In mid teen night behind its response. The -- effectiveness depends on the commitment. Ingenuity. And integrity. Of this bit -- And Michael policy makers. -- -- America who with great dedication. Mr. President. Thank you for giving me this opportunity. To continue -- the -- when he's here. And carrying -- its important work. And so without a long awaited announcement has been made -- diner and whitehouse there the president's. Announcing his pick for a replacement for current fed chief Ben Bernanke that being Janet Yellen 67 year old. Brooklyn born right now she is the vice chair the Federal Reserve for the past three years. And as you just heard the president their -- -- the personal stories and anecdotes. Behind his nominee I -- bring in Mary Bruce outside the White House and Lauren -- -- -- talk about this historic. Very significant announcement by the White House Mary. Breaking barriers in many forms. Absolutely -- on as you mentioned would if confirmed now be the first woman at. To ever chair the Federal Reserve and -- -- hundred year history but make no mistake she also would be one of the most accomplished -- -- ever. As one of her former colleagues described her she's a small lady with a large IQ just an incredibly impressive track record. She served for the last three years as the vice chair of the -- but she also with a longtime professor at Berkeley just an extensive experience with the tensions were there for over a decade so. -- silly -- 100% qualify for this position as well as we just heard her husband and her son obviously economists as well so it runs in the family. That's right it is absolutely a family affair she met her husband at the Fed. He also has an impressive and our -- may even Nobel Prize winning economist their son is also an economics professors as the president mentioned -- must be -- -- the conversations are on the. Dinner -- I can only imagine -- are bringing into discussion because obviously you know we've been focusing so much on the economy and the recovery that it is made and obviously we heard there. The president talking about the struggle that has been over the past several years and Ben Bernanke been at the head of Federal Reserve. What are the policies in the changes in the any outlooks that Janet -- how -- second in different from Ben Bernanke. So Janet Yellen is very -- seen as in line with Ben Bernanke in terms of their views about monetary policy and what's needed for the economy if anything Janet Yellen is seen as an even more -- Then Ben Bernanke meaning she would favor even more stimulus to make sure to get unemployment down and is less concerned with some of the risks associated with their policies and less concerned about inflation says she is seen. As there is being continuous with the policies that has being. -- implemented by Ben Bernanke's fed over the last eight years and so in that regard -- seen as representing really the status quo. Lawrence school me a little bit taken back to each on 101 I don't want to talk about obviously that bond buying program from the Federer. Point of view. But how does it affect interest rates how does it affect mortgages 401 case -- mean really for a lot of people that we pays much attention that 8586 billion dollar price tag. A lot of folks wonder and what does that matter to their bottom. Line right to keep it very simple what that does is it just -- is down interest rates and keeps them suppressed so on the one hand that they can control short term rates because -- stats. The federal funds rates which is very close to zero said -- on the short term side of things and then on the longer term. And ending the yield curve they pushed down rates through this bond buying -- kind of that toying with that the monetary supply is how they pushed down those rates. So what that means is it mortgage is. Auto loans. All of interest rates all of the costs of borrowing have been kept as low as possible by the Fed through its policies so when you heard -- -- there. About how more Americans had been able to. Pay their mortgage is paid their car lines borrow. That all is kind of -- touching upon the policies add this bad that it kept rates very low allowing Americans to refinance for lower rates in their home. To borrow money to get cars speak his bid price of those loans is lower because interest rates are -- that the cost of borrowing. Is lower presumably than it otherwise would be and that is one way that they are trying to stimulate the economy. And that obviously is one aspect that affects everyday Americans and in the UNI -- on a very regular basis but what about like your 401K what about investments. What is the market reaction -- to a Janet -- share. OK so a couple things here so one thing when I'm talking about interest rates that impacts savers if you just want to save your money in a low risk way. You really can't make any money interest rates are so low so one thing that their policies -- If push people to take on more risks. So that in tandem with all of the easy money that the -- is created is are few reasons why people believe that that is really supporting that stock market so some people. Even call it the Fed put essentially that this and has the markets back with its policies so at Janney gallon. -- chair which represents the status quo which is behind these easy money policies in expected to continue -- even longer than perhaps Bernanke bled. That is bullish for stocks is bullish for the market it's seen as something that would keep support there to keep prices rising in terms of -- -- and riskier investments. And as -- -- taking a look at the Dow is up about 62 points 14100838. In these first couple moments after the president made the announcement -- Janet Yellen -- his. Nominee pick for fed chair. -- I want to ask you -- just briefly about her history some she had some pretty dire warnings pretty stark warnings just right prior to the 2008 crash. -- she. Actually seen this is one of the that kind of positive. Attributes -- Janet -- that think that her supporters were were arguing I had ever nomination which is that she has banned. Creating good forecaster in terms said the economy. I had -- housing bubble she was one of the bass -- colleagues to kind of raise a red flag over that also post crisis the Wall Street Journal did an analysis and she was one of the best out of her colleagues in terms of accurately forecasting. The economy overall and also labor and growth and Clinton says she -- being. A relatively better forecaster than her -- she's she's pretty much been one of the best if not the best the best. When you look overall at the picture and and third or fourth when it comes to inflation and -- -- -- so that's a pretty solid track record in terms of forecasting. Mary I want to bring you back into this let's talk about the support that she would be getting coming in as we were talking about this just before the president took to the podium there. I Janet Yellen is actually considered the second pick Larry Summers was really the front runner for a long time -- but the president could -- support within his own party. As in this along very drawn out politically charged process to get to this point -- the president. Has now announced his new pick for the Fed share. The president originally. His topic was supposed to be -- -- was thought to be former Treasury Secretary Larry Summers he however. Eventually pulled out his name from the running last -- last month. After he with. On -- receiving -- a lot of democratic criticism mostly due to his previous policies under the Clinton administration. Then Janet -- emerged as the new front runner. But as you mentioned going forward we suspect she will get confirmation -- -- A received lots of support for many senate Democrats it is possible there will be some Republican push back. Given her support for some of the Fed's recent policies and in previous years but but overall we suspect that she will be. Confirm going and do we have any idea when a hearing might take place. Not yet as you can imagine -- -- little difficult given a government shutdown but but we're looking -- loses what. More effective now 89 days into the into the -- out. Laura let me ask you about it -- some of the ways that the policy may either be continued from. Those or establishment Ben Bernanke and going forward now if in fact Jenny -- is confirmed how quickly do you think that she would move in implementing her own strategy. I think that what she -- continue is the Fed's strategy that they -- employed so what policy is expected to be under gallon -- continued low rates and continued monetary stimulus now as you know well Dan. In September a lot of people were expecting the bond buying to be tapered a little bit to be pulled back upon a little and that did it happen. The Fed minutes that came out today showed that they were torn on -- decision and -- many fed policy makers still anticipated. Tapering to come this year now given that shut down given -- debt ceiling many people said forget about said that tapering this year and with Janet Yellen now. The Fed chair and they expect tapering to come who knows -- some people say she represents QE forever either say you have to have a more new wants you. But that she is more likely to. Even be more aggressive -- terms of say. She could institute a policy where she says okay we're gonna print money until we get to -- target when it comes to growth which is something that -- an economist Michael what -- -- advocated GDP targeting so she's seen as someone who actually. Maine -- go for some of those policies of before some of those policies now action magician as a full committee and who were involved in in. Making monetary policy it's not just -- -- vote you know it's -- it's a process. -- however that is one thing it is different that is between that is seen as different between her and and -- in terms of the types of policies they may favor but she's very much scene is continuing the policies. That bad Bernanke and and the current -- had implement it. -- -- without getting too much into the weeds what are her views and and how she perceived on regulation essentially breaking down big banks because that's certainly it's something that a lot of people consider. We're looking at monetary policy of not repeating what happened just four years ago. Sure OK so couple thanks so we've been talking a lot about Larry Summers and I -- that the at your your reporter mentioned his record during the Clinton administration so. One of the big criticisms of Larry Summers with that he was too close to Wall Street that -- he was involved in. On Wall Street working for firms in an it consulting. Position are giving speeches -- -- paid a lot of money for for some of these large -- -- those are some of the complex scene there. It's a very important and -- independent Central Bank. It is not influenced by industry that is not to influenced by congress of the White House they are supposed to be independent. One of the main things that Janet Yellen I would say and it people -- interviewed would they had going former. Is that she is not politically connected to this administration and she doesn't have a history working for Wall Street that -- -- Larry Summers does so. For example where Larry Summers -- had been to the White House many times since leaving Obama administration where he worked in the last few years -- Janet Yellen has met with how central bankers. All over the world she's -- into the White House I think once and met with congress I think. Twice members of congress that she really is not connected to the administration and as I mentioned she is not worked -- Wall Street firms like say Larry Summers. EE it's almost been paradigm shift going from those close to Wall Street more to the academic view which is really what the -- administration has sort of tried to bring out to the forefront in some other nominations. Yes I mean opinions all of these fed chairs are high. Highly academic I mean there all MIT educated Princeton educated Yale educated Harvard educated they are all I can't it's panic. I mean to the point that critics you know and that's one of the complaint is that they're too much an ivory tower -- around with their economic. Tinkering around with their economic models and and you know rowdy doesn't always match up to an economic model and if -- can imagine. The main criticisms that that a lot of people haven't central bankers is that they are too academic but certainly she represents a continuation -- The academia. She got her Ph.D. gala she has been -- teacher at Berkeley on she very much has sent. Academic Fred that is right in line with her predecessors. And those obviously marry those with the policies but the but the person as well really makes it very significant statement coming from this White House in fact. If she is confirmed by the senate -- she would not be the first fed share. In the world female Fletcher in -- Russia and Malaysia both have female Central Bank leaders but obviously the first here in the United States. And as we are talking about the first and along times from the other party from Democrats. That's absolutely not only -- she break this glass ceiling and we've been talking about but she is would be the first democratic confirmed. To hold the position in over thirty years. So the president is breaking away from from an obvious -- -- past tradition here with this pick. Obviously as you mentioned does send a strong signal to the world and in making -- -- as something. We mentioned Larry Summers ever part of the criticism around the president supposedly picking him is Aaron -- considering him as his front runner. With a lot of criticism that this administration hasn't had -- -- women in high positions so that's another thing. There's a benefit for picking -- down obviously but also some in the president I think -- considered in picking her as if some of that criticism and blowback for not having an appointment. And in this in his administration and. The White House expressed concern about the timing given the fact that we are in the shut done right now as far as how quickly they might be able to hold a hearing and get confirmation which. It's -- saying it's a simple majority that's required for this nomination. As mentioned we -- -- shut down -- ninth with another one of those big questions. Not only you know at one of the long list of things that bad. It on the back burner now as we look. In the middle of this shut down to hopefully ending the shutdown in getting back to work but that's one of the things that is a priority of course for this administration but. And -- he isn't a job through the end of. -- all right and we shall wait and see how that will play out as we all wait to see. The next day as they'll be counted out in this government -- Mary -- from outside the White House and Laura -- not -- thank you both this afternoon we appreciate that. We have a complete report on abcnews.com. On this historic announcement for president Obama's pick. For -- replacement for Ben Bernanke. At -- chair Janet Yellen. Sent to go before senate confirmation. For now I'm Dan that New York with the CBC news digital special report.
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