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Biden taps former Fed chair Janet Yellen to lead Treasury

President-elect Joe Biden has elected former Federal Reserve Board Janet Yellen as Treasury Secretary. This is a central role in helping her formulate and direct his economic policies.

What you need to know

  • President-elect Joe Biden has appointed former Fed Chairman Janet Yellen as Treasury Secretary

  • Yellen will be the first woman to lead the Treasury

  • Yellen was the first woman to chair the Fed before being replaced by President Trump and Jerome Powell.

  • Yellen is well known at Capitol Hill after many years of testimony as Fed chairman of the Senate on economic and interest rate policy.

A person familiar with Biden’s plans, who discussed on condition of anonymity, confirmed the news to the Associated Press. Nominations were first reported by The Wall Street Journal.

Widely admired in the financial world, Yellen will be the first woman to lead the Treasury, dating back to Alexander Hamilton in 1789. Her nomination was confirmed by the Associated Press by someone who spoke on anonymous terms to discuss Biden’s plans.

As Treasury Secretary, Yellen will face a volatile US economy that has been weakened by a pandemic recession and is now on the verge of a booming virus epidemic that is increasing pressure on businesses and individuals. There is growing concern that the economy could fall into a “double-bottom” recession this winter as states and cities impose restrictions on businesses and stay home to prevent consumers from getting sick. I will.

Yellen, 74, a breakthrough in male-dominated economics, was also the first woman to chair the Federal Reserve Board from 2014 to 2018. The leader who pushed her into politics.

The Treasury post will add a new chapter to a wide variety of careers in Yellen’s monetary policymaking. As a secretary, she represented the administration of global financial affairs and led a vast sector responsible for everything from government finance and tax collection to global currency markets, banking regulations and money printing. She is also Biden’s primary adviser and public spokesperson for his financial agenda.

Yellen will also take on the formidable task of assisting Kentucky Republican Senator Mitch McConnell in negotiating economic policy.

At the same time, she already enjoys the benefits of working closely with many Fed policy makers, especially on the Fed’s board of directors, and building long-standing relationships with Jerome Powell, who later took over as chairman. Let’s do it. Economic health depends in part on close coordination between the Fed, an independent body, and the Treasury, the presidential cabinet, especially during major crises such as the pandemic recession that occurred in early spring. .. Shortly after the crisis broke out, the government established a series of lending programs designed to strengthen businesses and local governments. This includes a partnership between the Treasury and the Fed.

Prior to leading the Federal Reserve Board, Yellen was Vice-Chair for four years and formerly President of the Federal Reserve Bank of San Francisco for six years. Prior to that, he led the Council of Economic Advisers after serving on the Fed’s board of directors under President Bill Clinton.

Yeren is well known in Capitol Hill after many years of witnessing as FRB chairman of the Senate Committee on economic and interest rate policies. During that time, she frequently clashed with Republicans who accused her of keeping interest rates too low after the 2008 financial crisis. Among them, Yellen and his predecessor, Ben Bernanke, accused them of increasing the risk of runaway inflation and asset bubbles that could destabilize financial markets.

None of those fears came true. On the contrary, under Bernanke and Yellen, and later under Powell, the Fed’s more difficult task was simply to raise inflation to the Fed’s annual target level of 2%. It hasn’t done so consistently yet.

Democrat Janet Yellen served only one four-year term as chairman of the Fed when President Donald Trump decided to replace her with Republican Powell. The move broke the president’s 40-year tradition of allowing the Fed chair to serve at least two terms, even if they were first nominated by the opposition president.

Mr Biden said last week that his choice as Treasury Secretary was “someone I think would be accepted by all elements of the Democratic Party and progress through a moderate coalition government.”

Yellen is backed by many progressive groups, said Jeff Hauser, executive director of the left-wing organization Revolving Door Project. Yeren is a labor economist, unemployment expert, a problem that could pose a challenge to the Biden administration, and the unemployment rate remains at 6.9% as the economy struggles to recover from the pandemic recession. high.

During his tenure as Fed chairman, the central bank focused much of its policy on trying to maximize employment, the second of two parliamentary missions, from the fight against inflation, which had been dormant for decades. I started to move. Yellen praised her attention to disadvantaged groups, including the long-term unemployed. She has visited employment training centers many times to highlight the need for training programs to provide good jobs to people.

Yellen has been tackling the issue of climate change this year and has approved a carbon tax as a way to reduce greenhouse gas emissions.

When she resigned from the Fed in early 2018, Shawn Sebastian, co-director of the Fed-Up coalition, a group of progressive groups, called Yellen’s departure a “national worker loss.” He praised her efforts to address “economic inequality, racial disparities in the economy, the role of women in the workplace, and the need for more diversity in the Fed.”

However, some progressives have criticized Yellen for the Fed’s December 2015 decision to raise the benchmark rate, which had been pegged since late 2008, from near zero in the midst of the financial crisis. The rate hike, which caused the dollar’s sharp rise in value, helped slow US economic growth in 2016, and many economists now see it as premature.

After leaving the Federal Reserve, Yellen became a prominent companion living at the Liberal Brookings Institution in Washington. She initially didn’t comment on Trump’s decision not to offer a second term. But in a 2019 interview, Yellen said he was well aware that Trump “or knows the Fed’s obligations” in economic policies to stabilize prices and maximize jobs. He said he didn’t think.

Yellen is married to Nobel Prize-winning economist George Akerlof, whom he met in the federal canteen in 1977. They have a son, Robert, who is a professor of economics.

The Associated Press contributed to this report.

Biden taps former Fed chair Janet Yellen to lead Treasury

Source link Biden taps former Fed chair Janet Yellen to lead Treasury

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