Obama names Yellen as next Federal Reserve chair

US President Barack Obama Wednesday formally nominated current Federal Reserve Vice Chairwoman Janet Yellen to be the next Fed chief. She replaces the outgoing Fed Chairman Ben Bernanke.

Speaking at a White House nomination ceremony, Obama said that Yellen was committed to job creation in the US and choosing Yellen as the head of the central bank was one of the most important decisions for him to make.

"I considered a lot of factors. Foremost among them is an understanding of the Fed's dual mandate: sound monetary policy to make sure that we keep inflation in check, but also increasing employment and creating jobs, which remains our most important economic challenge right now. And I found these qualities in Janet Yellen."

Janet is renowned for her good judgment, Obama said, adding that she sounded the alarm early about the housing bubble, about excesses in the financial sector and about the risks of a major recession.

"She doesn't have a crystal ball, but what she does have is a keen understanding about how markets and the economy work, not just in theory, but also in the real world," the president said.