Yellen, the Fed’s vice chair, would replace Ben S. Bernanke, whose second four-year term as chairman expires Jan. 31. She would take over at a crucial time — the central bank is gearing up to reduce its unprecedented support for the economy without damaging the fragile recovery.
Obama will announce the nomination at the White House on Wednesday afternoon, joined by Yellen and Bernanke.
The Fed’s leadership and policy signals are being closely watched around the globe, especially in developing economies where many fear a too-rapid or poorly communicated pullback of stimulus would have severe consequences for global financial markets and the flow of capital.
The nomination was expected and culminates an unprecedented public campaign that included letters from congressional groups and extensive lobbying by economists and others in and out of Washington.
In naming Yellen, 67, a veteran central banker with a reputation as a consensus builder, Obama opted for consistency and a candidate favored by many economists and liberal Democrats. The president’s top choice, former Treasury secretary Lawrence H. Summers, withdrew from the running in September in the wake of mounting political opposition.