Former Fed Chair Janet Yellen Chosen to Become Treasury Secretary Under Biden Administration
Economist Janet Yellen has been selected by President-elect Joe Biden to become Treasury secretary when the new administration takes office in January. She will be the first female Treasury secretary and this will be one of the few times that someone’s experience includes wielding economic power from the White House, the President’s cabinet, and the Federal Reserve.
The current state of the economy under the coronavirus pandemic presents a challenge to Biden, but Yellen’s nomination will place her at the forefront of handling the fallout and rebuilding the economy. “While the pandemic is still seriously affecting the economy, we need to continue extraordinary fiscal support,” Yellen said in a Bloomberg interview, according to a New York Times article covering the nomination.
As Treasury secretary, Yellen will be in a more political role that will likely require negotiating with a Republican-controlled Senate. Biden is expected to urge for more economic aid, and Yellen would play a central role in brokering another stimulus deal that has failed to pass through a politically divided Congress.
Yellen served as the chair of the Federal Reserve from 2014 to 2018 and oversaw a slow rise in interest rates as she and others tested whether unemployment could decline without increased prices. The Fed’s policies during that time led to a strong labor market and a record-long expansion, which drove unemployment to its lowest rate in 50 years before the pandemic.
As a Keynesian economist, Yellen believes that markets have imperfections and advocates for government intervention. She has also expressed concerns about regulatory roadblocks under the Trump administration. Her experience would likely help facilitate the necessary relationship between the Treasury and the Fed.
Henry Paulson Jr., Treasury secretary under George W. Bush, supported the nomination and said that Yellen “has the experience, talent, credibility, and relationships with members of Congress on both sides of the aisle to make a real difference.”