Yellen to quit Fed board after Powell sworn in

US Federal Reserve Chief Janet Yellen has announced that she will step down from the body's board of governors when her successor Jerome Powell takes over next year. Although her four-year term expires on February 4, she would have been permitted to stay on the board until 2024.

"As I prepare to leave the board, I am gratified that the financial system is much stronger than a decade ago, better able to withstand future bouts of instability and continue supporting the economic aspirations of American family and businesses," Yellen said in her resignation letter to President Donald Trump.

Yellen was named to the post as the head of the US central bank in 2014 by former President Barack Obama, making her the first woman to hold the position. She was known for her belief that monetary policy was more important than business trends in stabilizing the economy, and was a staunch supporter of the stimulus funds pumped into the economy in the wake of the 2008 global financial crisis.

Her leadership has been credited with putting the economy on firmer footing after the recession that followed the crisis.

After Trump's election, Yellen promised to protect the Dodd-Frank financial regulations signed into law by Obama in the aftermath of the 2008 crash, and which the current Republican-controlled Congress is attempting to dismantle.

Despite her policy differences with Trump, Yellen's move was not necessarily political, as many former Fed chiefs have stepped down after the end of their term.

Consensus candidate

Jerome Powell was nominated by Trump on November 2, but still must be confirmed by the Senate before starting the job.

Powell, who is already a member of the Federal Reserve's seven-seat board, is widely seen as a continuity candidate unlikely to raise interest rates, but more amenable to the current administration's push at deregulation.

Obama left office with two board seats unfilled, and successive departures since Trump entered the White House mean that the president could name as many as five members, completely reshaping the makeup of the board.

One candidate that has been floated for Powell's vice-chair is Egyptian-American businessman Mohamed El-Erian, who currently serves as an economic adviser to Germany-based financial services firm Allianz.

es/cmk (AP, AFP, Reuters)