Powell got bipartisan support with a vote of 85-12. He is scheduled to replace Yellen when her term ends Feb. 3.
"Jay has earned the respect and admiration of his colleagues for his expertise and judgment," the president said.
During his confirmation hearing later in November, Powell said he's concerned about the sustainability of domestic economic health and favors easing burdens on small banks.
"Tailoring of regulations is one of our must fundamental responsibilities. We want regulations to be the most intense, the most stringent for the very largest, most complex institutions and want it to decrease in intensity and stringency as we move down through the regional banks and the community banks," Powell told the Senate Committee on Banking, Housing and Urban Affairs.
Powell has served on the Fed board since 2012 and was the undersecretary of the Treasury for domestic finance during the administration of President George H.W. Bush. He earned his bachelor's degree from Princeton University and a juris doctor degree from Georgetown University.