President Obama formally nominated Janet Yellen to be chairman of the Federal Reserve on Wednesday afternoon at the White House.

Noting that the selection of the Fed chairman would be "one of the most important economic decisions" he would make as president, Obama called Yellen a "proven leader, and she's tough, and not just because she's from Brooklyn."

Obama said the 67-year-old Yellen, who was the president of the Federal Reserve Bank of San Francisco from 2004 to 2010 before becoming the central bank's vice chair, is "renowned for her good judgment" and claimed that she "sounded the alarm early about the housing bubble."

Yellen accepted the nomination by pledging to meet the "great responsibilities Congress has entrusted to the Federal Reserve."

"The mandate of the Federal Reserve is to serve all of the American people," she said, and "too many Americans still can't find a job and worry how they will pay their bills and provide for their families" in the current weak economy.

Yellen now faces a lengthy confirmation process. Although it is expected that she will clear the Senate with relative ease, her nomination comes at a turbulent time for Congress and against an uncertain economic background. Senate Republicans likely will subject her to tough questions about her involvement in the Fed's unprecedented efforts to ease monetary conditions to fight the recession and about her role in overseeing West Coast banks that failed during the financial crisis.

Current Chairman Ben Bernanke was also on hand for the announcement. President Obama hailed Bernanke as "a voice of wisdom and a steady hand," and thanked him for displaying "tremendous courage and creativity" in responding to the recession.

Bernanke had refused to answer all questions about his future before the announcement of Yellen's nomination, and it's not known what he will do after leaving the central bank. The 59 -ear-old former professor joked in a June speech at Princeton that he had written the school to inquire about the status of his leave and had been turned away, but otherwise he has given no hints about whether he will return to academia or pursue opportunities in the private sector.