A spokesman for Biden's campaign declined to comment. Yellen, reached by phone, also declined to comment. The Wall Street Journal earlier on Monday reported that Biden planned to chose Yellen.

The S&P 500 extended gains and the U.S. dollar index dipped on the news.

COMMENTS:

JOSEPH STIGLITZ, NOBEL PRIZE WINNING ECONOMIST AND PROFESSOR AT COLUMBIA UNIVERSITY, NEW YORK

@JosephEStiglitz: "Congratulations, Janet Yellen! Terrific news."

TONY FRATTO, FORMER SPOKESMAN FOR THE U.S. TREASURY

"With the tax code off the table there is a lot of ground, actually, for bipartisan cooperation on the inequality issue."

"The biggest thing they can do is get the macro economy back again, which is still a function of getting beyond COVID and providing more financial support so the hole doesn't get deeper."

KEVIN GIDDIS, HEAD OF FIXED INCOME, RAYMOND JAMES, ST PETERSBURG, FLORIDA

"I think it is a fine selection and she should be confirmed with ease. It will also make for a good working relationship between the Fed and the Treasury."

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT

"She seems a dovish individual as far as Fed policy is concerned and the markets like dovish policy. That's why we saw a quick market reaction in the past 40 minutes."

"Experience, knowledge of the system, and a deep understanding of monetary policy, she brings a lot to the table. And having an intimate knowledge of how the Fed works and bringing that to the Treasury (Department), it's a good move."  

"She doesn't have a lot of conflict of interest doesn't carry any baggage. She's respected by the markets."

TOM GRAFF, HEAD OF FIXED INCOME, BROWN ADVISORY, BALTIMORE

"Janet Yellen is at once a historic pick, in that she's the first woman to hold the job, but also very much a Biden-style down the fairway selection."

"I think it is a signal that he wants someone in that seat who can guide economic policy first and regulatory matters second."

"Yellen should be a very strong advocate for more aggressive fiscal policy, and given her gravitas around Washington, it may make her the single most effective fiscal expansion advocate Biden could have picked."

GUY LEBAS, CHIEF FIXED INXOME STRATEGIST, JANNEY MONTGOMERY SCOTT, PHILADELPHIA 

"Yellen is a very known quantity for markets and for Congressional officials, which arguably reduces uncertainty on the margin. I'm not sure that there are obvious policy implications here, save for the fact that Yellen's background and experience is both domestic and labor-markets focused."

KEITH LERNER, CHIEF MARKET STRATEGIST, TRUIST/SUNTRUST ADVISORY SERVICES, ATLANTA"From a market perspective, Janet Yellen is a safe choice. Right now, what you have is the Treasury and the Federal Reserve with a common mission, working very closely. The market views as positive to have someone who understands the inner workings of the Fed and the importance of working together. The other side of it is that the market views Janet Yellen as dovish, so there will be continuity as far as things that they try to do to support the overall U.S. economy."

CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, INDEPENDENT ADVISOR ALLIANCE, CHARLOTTE, NC

    "It's a very good pick because she has familiarity with the markets and will work well with the Fed, given her long tenure there, at a time when fiscal policy is badly needed to augment monetary policy because of the surge in coronavirus cases and possibility of selective lockdowns throughout the country."

MICHAEL ANTONELLI, MARKET STRATEGIST AT BAIRD IN MILWAUKEE

"I'm excited that we will get the first female Treasury Secretary in the history of our great nation.  Yellen is very capable, proven in her time as Fed chair, and brings deep, meaningful insight into how markets and the economy work to such an important position. We saw markets uptick when the decision was announced, so I believe they are more than happy with the choice. It's a really solid choice in my opinion."

JAKE DOLLARHIDE, CHIEF EXECUTIVE OFFICER, LONGBOW ASSET MANAGEMENT, TULSA, OKLAHOMA 

    "It's a shrewd safe pick. It takes the risk off the table that he was going to suggest Elizabeth Warren."

  "Yellen had an impeccable record at the Fed ... She replaced a rockstar, Ben Bernanke and appeared to do that effortlessly."

    "A known commodity in a uncertain situation is a potential boon for the market," he said. "The Treasury is probably more important than Congress in getting the next stimulus package through. This removes a huge roadblock."

    "It's continuing to trade in vaccine news but it's a nice change up for the market. Its something more tangible, the Treasury Secretary."

JUSTIN HOOGENDOORN, HEAD OF FIXED INCOME STRATEGY, PIPER SANDLER, CHICAGO

    "The initial reaction is positive. She's got a ton of experience. Who wouldn't feel comfortable with her at the helm?"

    "She certainly knows her way around and it would just be interesting because obviously that's a more political-type position than her role at the Fed. But certainly, the economic recovery is going to be the most important thing she does."

JOHN DOYLE, VICE PRESIDENT OF DEALING AND TRADING, TEMPUS, WASHINGTON, DC

"I think she is a great pick.  She was the first women head of the Fed and will be the first woman Treasury Secretary."

"I think she will bring great stability to the post.  She held leadership positions in crisis before and performed well,"

"I think she will , make a strong push for fiscal stimulus to compliment the Fed."

"Overall, her appointment would be seen as slightly dollar negative as more aggressive stimulus could cause treasury yields to rise. However, with the GOP likely to hold the Senate, there will be handcuffs on what the Biden administration can get pushed through."

KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CAMBRIDGE GLOBAL PAYMENTS, TORONTO

"Yellen's appointment augurs well for the global economy and financial markets - in bringing a consensus-driven and business friendly approach to the role, she is well-placed to negotiate a fraught political landscape and deliver more stimulus spending. This should weaken the threat environment and push investors further out along the risk curve - directing flows into higher risk currencies and away from the dollar. "

(This story has been refiled to fix typo in headline)

(Compiled by the Finance & Markets Breaking News team)