The Senate voted 56-26 to approve the confirmation, with 11 Republicans joining Democrats in voting for Yellen.
Yellen, currently the Fed’s vice chair, would become the first woman to take the helm of the U.S. central bank in its 100-year history.
She was nominated by U.S. President Barack Obama for the post in October and would be the first Democrat to serve the job since 1987.
Born in 1946, Yellen has been vice chair of the Fed since 2010. She is considered an influential architect of the Fed’s extraordinary measures to revive the economy through clearer policy communication and large-scale asset purchases after the interest rates were reduced to near zero in late 2008.
In her recent remarks, Yellen voiced concerns about high unemployment and spoke in favor of the Fed’s bond-buying program as a way to stimulate the economy.
“Janet is committed to the Fed’s dual mandate of keeping inflation in check while also addressing our most important economic challenge by reducing unemployment and creating jobs. And she understands that fostering a stable financial system will help the overall economy and protect consumers,” said Obama in a statement following the vote.
“I am confident that Janet will stand up for American workers, protect consumers, foster the stability of our financial system, and help keep our economy growing for years to come,” he added.
The widely-scrutinized Fed’s policy shift comes at a delicate moment when the central bank has just begun gradually normalizing its monetary policy after a string of data pointed to a better-than-expected growth rate and steady improvement in the labor market.
In December, the Fed announced that it would start in January to taper its purchases of Treasury and mortgage-backed debt to a pace of 75 billion dollars a month from 85 billion dollars a month.
The Fed’s decision “to modestly reduce the pace of asset purchases at its December meeting did not indicate any diminution of its commitment to maintain a highly accommodative monetary policy for as long as needed,” Bernanke said in a speech earlier this month, reflecting on his tenure. “It reflected the progress we have made toward our goal of substantial improvement in the labor market outlook.”
“The Fed will need to exercise caution as it scales back further on its pace of asset purchases. We have experienced several episodes in the past few years when a burst of favorable data led to increased optimism that soon proved unwarranted,” said David Stockton, a senior fellow at the Peterson Institute for International Economics (PIIE).
In an analysis on the challenges lying ahead for Yellen, the former Fed chief economist said she may need to adjust the tapering steps should the recovery proves to be stronger or weaker than expected, and also pay close attention to the persistently subdued inflation.