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WASHINGTON: President-elect Joe Biden is expected to nominate former Federal Reserve Chair Janet Yellen as U.S. Treasury Secretary, breaking a 231-year-old gender barrier and putting a seasoned economist and labor market expert to Charged with pulling the country out of the steepest recession since the Great Depression.
The move, confirmed by Democratic allies of Biden’s campaign, will shift the Treasury’s focus toward progressive efforts to address growing economic inequality and fight climate change, and shift away from the Trump administration’s pre-pandemic emphasis on cutting taxes. and make financial regulations more flexible.
Yellen, 74, brings decades of economic policy experience to Biden and is respected by Congress, international finance officials, progressives and business interests alike. He has called for the fiscal spending taps to be turned on to revive an economy devastated by the coronavirus pandemic and would be the first person to head the Treasury, the Federal Reserve and the White House Council of Economic Advisers.
The publication will present a number of new challenges for Yellen, whose policymaking experience over the past 20 years has focused primarily on monetary policy, rather than fiscal policy. On the one hand, it signifies a much more political role than he played in his long career at the Fed, an institution that does its best to distance itself from partisan politics.
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A spokesperson for Biden’s transition team declined to comment. Yellen, contacted by phone, also declined to comment.
Yellen made history in 2014 when she became the first woman to chair the Federal Reserve after serving for a decade as president and governor of the San Francisco Federal Reserve. Republican President Donald Trump refused to renew his term, replacing her with current Fed Chairman Jerome Powell in 2018.
Born in Brooklyn, New York, to a family doctor and an elementary school teacher, Yellen earned a Ph.D. in economics from Yale in 1971 as the only woman in her class and taught at several major universities before becoming a top adviser. President Bill’s financial statements. Clinton from 1997 to 1999.
She is married to Nobel Prize-winning economist George Akerlof, whom she met in 1977 at the Fed, where they both worked in research positions.
FISCAL POLICY LEVER
At the Treasury, Yellen would play an important role in influencing fiscal and fiscal policy in the United States, tools he did not have at the Fed.
Yellen “will be a trustworthy, steadfast, and pragmatic hand at the helm as the United States navigates economic recovery from the COVID-19 pandemic,” said Tim Adams, a former Treasury official who is chair of the Institute of International Finance, representing more than 450 global banking firms.
Given that Democrats have only a slim chance of winning a majority in the U.S. Senate.In two Georgia elections in January, Yellen faces tough negotiations with Republicans to try to push Biden’s agenda, which includes increasing the tax the rich and invest billions of dollars in infrastructure, education and fighting. climate change.
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Economists said Yellen would be effective in articulating the economic case for spending more in the short term to boost job growth and narrow the gap between rich and poor. Yellen’s 2014 speech highlighting the rapid growth of inequality in America suggested it was a threat to “values embedded in our nation’s history.”
“She knows how to build consensus. She knows how to argue a point in her path. She is not violent,” said Julia Coronado, president of MacroPolicy Perspectives and a former Fed economist who worked with Yellen.
BUMP YELLEN FOR STOCKS
US stocks regained ground after the report.
Investors see Yellen as a force for greater fiscal action to combat the economic crisis unleashed by the COVID-19 pandemic, and as someone in a strong position to ensure that the Treasury continues to work closely with the Fed.
“Yellen should be a strong advocate for more aggressive fiscal policy, and given her seriousness in Washington, can make her the most effective fiscal expansion advocate Biden could have chosen,” said Tom Graff, director of fixed income at Brown Advisory in Baltimore.
The S&P 500 Index rose roughly unchanged on the day at the time of the initial report to gain 0.57 percent at the closing bell. Prices of United States Treasury securities remained low on the day. The dollar changed little.
Yellen was chosen over other seasoned economic policymakers, including current member of the Fed’s Board of Governors, Lael Brainard, 58, who served as undersecretary of the Treasury for international affairs early in the Obama administration.
Also being considered was Roger Ferguson, 69, chairman of the retirement asset manager TIAA and a former vice chairman of the Fed, who would have been the first black Treasury secretary.
Sen. Elizabeth Warren, Biden’s rival for the Democratic presidential nomination and a candidate for the Treasury job, tweeted that Yellen would be “an outstanding choice” and praised her for having “stood up to Wall Street banks” as chair of the Fed.
Earlier Monday, Biden named veteran diplomat Antony Blinken as his new secretary of state and named other members of his national security team.
Trump continues to dispute Biden’s victory in the Nov. 3 election without evidence, but the General Services Administration on Monday approved the start of a formal transition process.
Jen Psaki, Biden’s campaign advisor, tweeted that members of the economic team would be announced next week.
