The New York Times is reporting that, weather permitting, the Senate may vote Monday night on the nomination of Janet L. Yellen to lead the Federal Reserve.  The confirmation of Yellen, currently the Fed's vice-chairwomen would be historic as she would become the first woman to head the central bank in the U.S. although a number of women have held such positions in other countries.  She would also be the first Democrat Chairman since Paul Volcker was picked by Jimmy Carter in 1979.

If confirmed Yellen will replace Ben Bernanke who has served two terms as Fed Chairman after being nominated by George W. Bush.  Yellen has been a close ally of Bernanke and supported his accommodative monetary policies but did join with all but one of her colleagues in a December policy vote to begin winding down the Fed's asset purchase program.

A macroeconomist specializing in employment issues, she holds a Ph.D. in economics from Yale granted in 1971. She graduated summa cum laude from Brown, also in economics, in 1967 and was a member of the faculty at Harvard University and is a Professor Emeritus at the University of California at Berkeley where she was the Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics.  She became Fed Vice-Chair in 2010.

As MND reported at the time of her nomination by President Obama in October, Yellen was among the first to warn of the dangers of a housing bubble, doing so while President of the Federal Reserve Bank of San Francisco in 2005. 

(Read More: Yellen Brings Impeccable Foresight and Soothing Continuity as Fed)

At that time she said there were several reasons why monetary policy might not be the best tool to deflate that bubble.  "For one thing, no one can predict exactly how much tightening would be needed, or by exactly how much the bubble should be reduced. Beyond that, a tighter policy to deflate a housing bubble could impose substantial costs on other sectors of the economy that would lead to equally unwelcome imbalances. Finally, it's possible that other strategies, such as tighter supervision or changes in financial regulation, would not only be more tailored to the problem, but also less costly to the economy.  Her bottom line, she said, was that monetary policy should react to rising home prices or prices of any other asset "only insofar as they affect the central bank's goal variables-output, employment, and inflation"

She also warned of a possible credit crunch and ensuing recession when the Board of Governors met to discuss the looming financial crisis in 2008.  The "shadow banking system was freezing up, she said, and the economy was likely to slow significantly.

The Times said Yellen needs only the votes of a simple majority of senators and no Republican support when the vote is called.  Several Republican senators, notably Rand Paul (R, KY) had threatened to put a hold on her nomination but that threat has apparently been lifted.