By Channon Hodge and A.J. Chavar
Jacquelyn Martin/Associated Press
Ahead of Yellen's Confirmation Hearing: Before Janet L. Yellen can take the helm of the Federal Reserve, she will have to field questions on the Fed’s stimulus plans and maintain that its policies are working.
WASHINGTON — Janet L. Yellen, President Obama’s choice to lead the Federal Reserve for the next four years, plans to tell senators at her confirmation hearing on Thursday that continuing the Fed’s enormous stimulus campaign is the best way to revive the economy and hasten the program’s end.
Ms. Yellen’s prepared remarks, as expected, amount to an affirmation of the Fed’s current course, which she has helped create over the last four years as a crucial supporter of the current chairman, Ben S. Bernanke. She praised Mr. Bernanke for “wise and skillful leadership.”
Still, the job market and the economy are “performing far short of their potential,” Ms. Yellen, the Fed’s vice chairwoman since 2010, said in the brief remarks, which she is scheduled to deliver Thursday morning before the Senate banking committee.
She noted inflation also had been running below the 2 percent annual pace the Fed regards as healthy “and is expected to continue to do so for some time.”
“We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession,” Ms. Yellen said in the remarks, which the Fed released Wednesday afternoon. “I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”
Republicans plan to press her on those policies. They view the persistence of slow growth and high unemployment as evidence that the stimulus campaign is having little effect, and they are concerned about potential consequences, including higher inflation and financial instability.
Some Democrats, in turn, plan to press Ms. Yellen on financial regulation, seeking assurances the Fed will take stronger measures to rein in big banks.
But both Democrats and Republicans say they expect the Senate to confirm Ms. Yellen. Mr. Bernanke is scheduled to step down at the end of January.
“Dr. Yellen has proven through her extensive and impressive record in public service and academia that she is most qualified to be the next chair of the Federal Reserve,” Senator Tim Johnson, Democrat of South Dakota, the committee’s chairman, said in his own prepared remarks for the hearing.
The hearing will be Ms. Yellen’s debut as the Fed’s primary spokeswoman, a critical role because the Fed’s influence over economic activity depends on its ability to shape investor expectations about interest rates.
Mr. Bernanke has sought to strengthen the Fed’s influence by speaking more clearly about its actions, its reasons and its plans. Historically, the Fed has been guarded in its public statements, viewing confusion as a constructive tool, but Ms. Yellen made clear in her remarks — as she has in past public statements — that she is committed to clarity.
“Like the chairman, I strongly believe that monetary policy is most effective when the public understands what the Fed is trying to do and how it plans to do it,” she said. “I have strongly supported this commitment to openness and transparency and will continue to do so if I am confirmed and serve as chair.”
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