Ms Yellen, currently Federal Reserve Bank of San Francisco president, is expected to replace outgoing postholder Donald Kohn, sources close to the matter have claimed.
Mr Kohn recently announced he is to step down from the role, which is the second-highest ranking in the Fed, in June.
The new postholder, who has been in her present job since 2004, is considered to have a dovish outlook towards US monetary policy and worked as a financial advisor to Bill Clinton during his presidency.
She is also thought to be a trusted confidante of Ben Bernanke, chairman of the Fed.
In a speech made during February, Ms Yellen said that inflation is being pushed down by pressure on salaries and prices.
She was quoted by the Washington Post as saying: âFor the time being, the economy still needs the support of extraordinarily low rate.â
Mr Kohn has worked as vice-president of the Fed since 2006.
By Jim Ottewill