Obama names Yellen as next Federal Reserve chair

U.S. President Barack Obama on Wednesday formally nominated current Federal Reserve Vice Chairwoman Janet Yellen to be the next Fed chief and replace the outgoing Fed Chairman Ben Bernanke.

Obama said on Wednesday at a White House nomination ceremony that Yellen is committed to job creation in the United States and choosing Yellen as the head of the central bank is one of the most important decisions for him to make.

"I 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 now. And I found these qualities in Janet Yellen," Obama said.

Janet is renowned for her good judgment, Obama said, adding that she sounded the alarm early 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 a keen understanding about how markets and the economy work, not just in theory, but also in the real world," he said.

"Janet also knows how to build consensus. She listens to competing views and brings people together around a common goal," Obama added.

If confirmed by the Senate, Yellen would be the first woman to lead the U.S. central bank in its 100-year history. Bernanke is poised to step down in January 2014.

Yellen became the front-runner for the top job after former Treasury Secretary Lawrence Summers withdrew last month from the race.