On October 9, 2013, Barack Obama nominated Brooklyn-born Janet Yellen as the first woman chair of the Federal Reserve, saying “she had sounded the alarm bell early about the housing market bubble and excesses in the financial markets before the recession. She calls it like she sees it.”
In a 2005 speech, Yellen (then President and CEO of the Federal Reserve Bank of San Francisco) argued against deflating housing bubble because “arguments against trying to deflate a bubble outweigh those in favor of it” and predicted that the housing bubble “could be large enough to feel like a good-sized bump in the road, but the economy would likely be able to absorb the shock.” In 2010 she conceded her previous misjudgment of the housing crisis to the Financial Crisis Inquiry Commission: “I guess I thought that similar to the collapse of the stock market around the tech bubble, that most likely the economy could withstand [the housing collapse] and the Fed could move to support the economy the way it had after the tech bubble collapsed.”
