The US Senate has confirmed former investment banker Jerome Powell as head of the Federal Reserve, putting President Donald Trump's pick in a role of enormous influence over the world's largest economy.

Mr Powell, a current Fed governor, was confirmed by a vote of 85-12, paving the way for him to replace current Chair Janet Yellen when she steps down next month.

In choosing to replace Ms Yellen, Mr Trump dismantled another piece of his predecessor Barack Obama's legacy, making him the first US president in nearly 40 years not to reappoint the incumbent Fed chair.

Analysts say Mr Powell's appointment offered Mr Trump the chance both to remove an Obama appointee, while also signaling to markets that he favoured continuity with the slow and deliberate rate increases that had won Ms Yellen plaudits at the end of her term.

What will the arrival of a new chairman at the Federal Reserve mean for the US and global economy?

In addition to being a Democrat and the first female chief of the US Fedral bank, Ms Yellen was also a defender of the regulations enacted following the financial crisis - putting her at odds with the current White House's deregulation agenda.

Mr Powell, 64, had already been through the Senate confirmation process before becoming a Fed governor in 2012. Since then, he has never dissented from any of the Fed's monetary decisions.

During a drawn out search process, Mr Powell emerged as a centrist, consensus candidate - a Republican unlikely to raise rates too quickly but amenable to loosening financial regulations in ways long sought by Wall Street.

In promoting Mr Powell to the Fed leadership, Mr Trump takes another step toward remolding the Fed in his image, with four vacancies on the Fed's board of governors yet to be filled.

In November, Mr Trump also nominated university professor and conservative economist Marvin Goodfriend to fill one of the vacancies.

Mr Goodfriend appeared today for Senate confirmation hearings, where senators grilled him about predictions - which were never borne out - that Fed stimulus following the 2008 financial meltdown would drive up inflation without aiding the economic recovery.

Ms Yellen has led the Federal Reserve since 2014 and will relinquish the leadership post just as the US economic recovery is cresting, having overseen falling unemployment, robust growth and low inflation.

These economic conditions that have won her praise from many, including Mr Trump.