WASHINGTON: Federal Reserve Bank of San Francisco President Janet Yellen is President Barack Obama's pick for vice chairman of the central bank in Washington, two people with knowledge of the selection process said.

The nomination is pending completion of vetting by the Obama administration, one person said. The vice chairman gets a four-year term, subject to Senate approval, and a separate term on the Fed Board of Governors. The people spoke on condition of anonymity because the selection hasn't yet been announced.

Yellen, 63, would replace Donald Kohn, a 40-year Fed veteran who resigned effective June 23. Yellen, who served as President Bill Clinton's chief economist in the 1990s, said last month that the U.S. economy "still needs the support of extraordinarily low" interest rates. She would gain a permanent vote on monetary policy, instead of having a vote one year out of every three as a regional Fed chief.

Jen Psaki, a White House spokeswoman, declined to comment. Lily Ruiz, a spokeswoman for the San Francisco Fed, had no immediate comment.

The Obama administration is also working to fill two other vacancies on the seven-member Fed board. Fed Chairman Ben S. Bernanke, 56, won a second four-year term in January in a 70-30 Senate vote, as supporters who credited his actions to stem the financial crisis and recession overcame opponents saying he failed to prevent them.

New Policy Tools

As vice chairman of the board, Yellen would have a closer role in guiding the Fed as officials decide how much longer to keep the central bank's benchmark rate close to zero and how to use new policy tools to tighten credit as the nation emerges from the worst recession since the 1930s.

In her most recent speech, on Feb. 22, Yellen said the U.S. economy will operate below potential this year and next and still needs low interest rates to gain strength.

"This is not the time to be tightening monetary policy," Yellen said in San Diego. "But eventually the economy will gain enough momentum and won't need today's extraordinarily low interest rates."

Yellen spent most of her career teaching economics and researching labor markets, joining the University of California at Berkeley in 1980. She and her husband, George Akerlof, a Nobel Prize-winning economist, have written more than a dozen papers that included studies on unemployment, wages, street gangs and out-of-wedlock births.

Return to Berkeley

In 1994, Clinton appointed Yellen to be a Fed governor in Washington, serving until 1997, when the president moved her to the White House to chair the Council of Economic Advisers. She left the position in 1999 to return to Berkeley.

Yellen rejoined the Fed in 2004 as president of its San Francisco district bank, which represents the largest region by area and economic output. She has always voted with the majority of policy makers on interest-rate decisions.

She was last a voting member of the Fed's policy-setting Open Market Committee in 2009 and won't have a vote until 2012. The New York Fed president, who serves as FOMC vice chairman, is the only of the 12 regional Fed chiefs to have a permanent vote on monetary policy.

A native of Brooklyn, New York, Yellen graduated in 1967 from Brown University in Providence, Rhode Island, and earned a doctorate in economics in 1971 from Yale University in New Haven, Connecticut. She was an assistant professor at Harvard University in Cambridge, Massachusetts, from 1971 to 1976, spanning Bernanke's time as an undergraduate there.

Husband's Nobel

Akerlof, also a Berkeley professor, shared the 2001 Nobel Prize with Michael Spence and Joseph Stiglitz for their analysis of how markets function when buyers and sellers have different information about a product or service.

Before Yellen became the San Francisco Fed chief, the couple derided the economic policies of then-Republican President George W. Bush, with Akerlof calling them "by far the worst in our country's history." Yellen called Bush's tax cuts "economically reckless" in 2003 and went on to support Senator John F. Kerry's unsuccessful 2004 presidential campaign against Bush.