Biden picks ex-Fed chair Janet Yellen as treasury secretary

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By Amwal Al Ghad English
Janet Yellen
Former U.S. Federal Reserve chair Janet Yellen

U.S. President-elect Joe Biden has confirmed his nomination of former Federal Reserve chair Janet L. Yellen as his treasury secretary.

If confirmed by the Senate, Yellen, who was chair of the Federal Reserve by then President Barack Obama, will be the first woman to lead the U.S. Treasury Department.

Yellen, 74, is set to bring decades of experience as a regulator and economist to the crucial post, although she has never worked at the U.S. Treasury Department. She would have a rare public service resume for a treasury chief, having worked as Fed chair, president of the Federal Reserve Bank of San Francisco, and a top economic adviser to then President Bill Clinton.

In 2014, she was confirmed to lead the Fed by a vote of 56 to 26. Eighteen senators didn’t vote.

In the new post, Yellen is set to oversee the U.S. Treasury Department at one of the most perilous moments for the American economy in decades. The coronavirus pandemic caused an economic contraction from which the United States has not yet recovered, and full distribution of a vaccine still appears months away.

In August, Yellen told The Washington Post that it was “urgent” to enact more fiscal stimulus in response to the downturn. She explained that she was especially worried about cities and municipalities running out of money and low-income workers suffering permanent scars from being unemployed for a year or more.

During her time in the Clinton administration, Yellen was supportive of efforts to balance the federal budget. However, she has become an advocate of spending more money now that interest rates are at historic lows, making it cheap for the U.S. government to borrow money.

“Under current conditions, I think we can afford to increase federal spending or cut taxes to stimulate the economy if there’s a downturn,” Yellen spoke in January at the American Economic Association annual meeting, where she served as president.

In 2018, Yellen’s term as chair of the Federal Reserve expired, and President Donald Trump replaced her with Jerome H. Powell, who remains the Fed chair.

At the Fed, she helped oversee an economic expansion under the Obama administration but faced some criticism for backing interest rate hikes in his second term, which some economists believe suppressed demand before the American economy had fully recovered.

Trump had considered reappointing Yellen to serve as Fed chair for further four-year term, but some on his economic team felt she did not embrace the president’s deregulatory policy.

European Central Bank President Christine Lagarde has congratulated Yellen on her nomination, saying in a tweet: “Her intelligence, tenacity and calm approach make Janet a trailblazer for women everywhere.

 

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