Janet Yellen says U.S. economy needs to be stronger

Federal Reserve vice-chair Janet Yellen's remarks after U.S. President Barack Obama officially named her to succeed Ben Bernanke as chair of the Federal Reserve emphasized the need to strengthen the U.S. economy.

Obama thanked Bernanke for his leadership during the U.S. financial crisis at a press conference Wednesday in Washington.

"Ben Bernanke is the epitome of calm, and against the volatility of global markets he's been a voice of wisdom and a steady hand," Obama said.

He added that in Yellen he's found a tough and proven leader to take over as chairman of the Federal Reserve.

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

"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."

Yellen said she is committed to balancing inflation with job creation and financial stability going forward.

The past six years have been tumultuous for the economy and challenging for many Americans, she said."While I think we all agree, Mr. President, that more needs to be done to strengthen this recovery, particularly for those hardest hit by the Great Recession, we have made progress. The economy is stronger and the financial system sounder."

She credited Bernanke for his work stabilizing U.S. banks.

Yellen said she is dedicated to aiming for maximum employment, stable prices and a stable financial system in the U.S.

"The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they will pay their bills and provide for their families. The Federal Reserve can help, if it does its job effectively," she said.

"We can help ensure that everyone has the opportunity to work hard and build a better life. We can ensure that inflation remains in check and doesn't undermine the benefits of a growing economy. We can and must safeguard the financial system."

A close ally of Bernanke, Yellen has been a key architect ofthe Fed's efforts to keep interest rates near recordlows to support the economy.

Her comments in the Fed minutes show her support for continuing stimulus, until the U.S. economy shows clear signs of recovery.

Her appointment comes amid a federal shutdown as Obama and the Republican-controlled Congress battle over the U.S. budget. The Republicans are demanding changes in health care before they will approvethe funding to pay for government operations and raise the debt ceiling.

Oct. 17 looms as a deadline for an end to the impasse, as that is the date when the U.S. government runs out of money, having reached its $16.7-trillion borrowing limit.

In the meantime, federal departments that would provide economic data, including numbers about jobs, economic growth, exports and business expectations are not operating.

In the absence of this data, the Fed is unlikely to change course and many are now predicting the $85 billion US a month bond-buying program that keeps interest rates low will continue throughout the fall.

The Bank of Canada sent out a press statement welcomingYellensnomination and said it looks forward to continuing the close working relationship it has enjoyed withYellenand her colleagues at the Federal Reserve.