UPDATE 1-U.S. Senate sets evening vote on Powell to be Fed chair

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WASHINGTON, Jan 23 (Reuters) - The U.S. Senate on Tuesday agreed to hold an evening vote on the nomination of Federal Reserve Governor Jerome Powell to succeed Janet Yellen at the helm of the central bank, a move that would likely ensure continuity in U.S. monetary policy.

The Republican-controlled Senate voted 84-12 to move toward a final vote, which it agreed to hold at 5 p.m. (2200 GMT).

Powell, 64, was nominated by President Donald Trump in November to succeed Yellen. The lawyer and former investment banker, who was seen as an uncontroversial pick with views closely aligned with Yellen's, has served on the Fed's Board of Governors since 2012.

During a Senate hearing on his nomination in November, Powell defended plans to lighten regulation of the financial sector, and said he would "respond decisively" to any future crisis.

Powell has never dissented on a monetary policy decision during his nearly six years at the Fed. However, transcripts of central bank deliberations during 2012 released this month showed a level of discomfort with the Fed's massive bond-buying program.

Powell, who was tapped by then-President Barack Obama to serve at the Fed, emerged as President Donald Trump's choice to lead it from a slate of possible nominees that included both Yellen and others who might have pursued a sharp policy shift.

He has backed Yellen's direction on monetary policy and, in recent years, shared her concerns that weak inflation justified a continued cautious approach to raising interest rates.

The Fed hiked rates three times last year and policymakers indicated last month they would likely raise them three times more this year as part of their gradual campaign to put policy on a more normal footing. (Reporting by Howard Schneider; Editing by Tim Ahmann and Phil Berlowitz)