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What Janet Yellen will do with the nation's purse

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How well Yellen performs that task will have another impact, too – on the Fed's reputation. Many critics say the institution seems more attentive to big banks than to the American populace. One of Yellen's challenges will be to defend the notion that the Fed serves all the American people, and that it deserves to remain a largely self-managed institution, free from outside interference by the president or Congress.

Others have labeled her an inflation "dove" who'll allow greater erosion of the dollar's purchasing power – or risk a new housing or stock market bubble – in misguided efforts to reach the goal of a full-employment economy.

She'll be the first Democrat to hold the job since Paul Volcker back in 1987. But even Republicans don't doubt she has the résumé for the position. She's just spent four years as No. 2, the vice chair to Mr. Bernanke. Her career path has led her from prominent teaching positions to varied roles in the Federal Reserve System. Some have called her the best qualified nominee ever.

Yellen will be the first woman to head America's top financial policymaking post. Women have headed regulatory agencies from the Federal Deposit Insurance Corporation to the Securities and Exchange Commission. But the Fed role is far more visible and carries more clout.

No other major central bank around the world – including the Bank of Japan, the European Central Bank, the Bank of England, and the Swiss National Bank – has ever been led by a woman, either. Although Yellen has said in the past that she hasn't felt discrimination during her career, finance remains a male-dominated realm in America. Her elevation carries both substantive and symbolic importance.

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