(CBS News) President Obamawhen Ben Bernanke retires in January. If confirmed, Yellen will be the first woman to lead the Fed.
Shein an uneven recovery. The job would make Yellen one of the most powerful women in the world.
Yellen has risen to the top of a demanding and influential industry traditionally dominated by men.
"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,". "I should add that she will be the first woman to lead the Fed in its 100-year history"
The Wall Street Journal examined more than 700 predictions about growth, jobs and inflation made between 2009 and 2012. Out of more than a dozen Fed policymakers, the publication found Yellen's predictions were the most accurate overall.
The nominee was a standout early on. She was her high-school valedictorian who earned economics degrees at Brown and Yale.
She became an economic adviser to former President Clinton and, later, ran the San Francisco Fed. The 67-year-old wife and mother is currently Ben Bernanke's No. 2 and poised to take his place.
"She has the skills, she has the qualifications, she's the right person for the job," said Christina Romer, a friend of Yellen's, as well as former chair of Mr. Obama's Council of Economic Advisers. "On the other hand, am I thrilled beyond belief that we've cracked this glass ceiling? Absolutely."
Yellen's nomination comes amid deep political divides in Washington.
"She certainly is not a hero to Republicans, or to the right," said Jon Hilsenrath, The Wall Street Journal's chief economics correspondent. "One of the attacks on her is that she's too supportive of these easy monetary policies that could cause inflation down the road."
If the Senate confirms her nomination, Yellen will face the challenge of guiding the nation through a sluggish economic recovery.
For Nancy Cordes' full report watch the video in the player above.