World News – UK – AP Source: Biden taps former Fed Chairman Yellen to run the Treasury

President-elect Joe Biden has selected former Federal Reserve Chair Janet Yellen as Treasury Secretary, a key role in which she would help shape and direct his economic policies according to someone familiar with the transition plans is.

Widely admired in the financial world, Yellen was the first woman to lead the finance department in a line that goes back to Alexander Hamilton in 1789.

Your nomination was confirmed to The Associated Press by a person who spoke about Biden’s plans on condition of anonymity.

Yellen, 74, was the first woman to serve as Fed chair from 2014 to 2018. She later became an advisor to Biden’s presidential campaign on an unusual departure for a former Fed leader that pushed her into the political arena.

The Treasury post would add another new chapter to Yellen’s broader and diverse career in finance policy. As secretary, she represented the administration in global financial affairs and ran a broad department whose responsibilities range from government finances and tax revenues to global foreign exchange, banking regulation and the printing of money. She would also be a key advisor to Biden and a public spokesperson for his economic agenda.

As finance minister, Yellen would face a shaky U.. S.. . Economy weakened by the pandemic recession and now in the grip of a growing viral epidemic adding pressure on businesses and individuals. There are growing concerns that the economy could slide into a “double-dip” recession this winter as states and cities reintroduce restrictions on businesses and consumers to avoid getting the disease.

Yellen would also have to take on the daunting task of helping to negotiate economic policy with Sen. Mitch McConnell, the Republican from Kentucky, will remain the Senate majority leader if his party wins at least one of two runoffs to the Georgia Senate in early January.

At the same time, she would enjoy the benefit of longstanding relationships with many Fed policy makers, particularly Jerome Powell, who worked closely with her on the Fed’s board of directors and who later succeeded her as chairman. The health of the economy depends in part on close coordination between the Fed, an independent agency, and the Treasury Department, a cabinet division of the President, especially during major crises like the spring pandemic recession. Shortly after this crisis erupted, the government put in place a number of loan programs designed to help businesses and communities, including a partnership between the Treasury Department and the Fed.

Prior to heading the Fed, Yellen was vice chairman for four years and previously president of the Federal Reserve Bank of San Francisco for six years. She previously chaired the President’s Economic Adviser Council under President Bill Clinton after serving on the Fed’s board of directors.

Yellen is best known on Capitol Hill after testifying for years as Fed chairman on Senate committees on economic and interest rate policy. During those years there were frequent clashes with Republican lawmakers accusing them of keeping interest rates low for too long after the 2008 financial crisis. Some of them said Yellen and her predecessor, Ben Bernanke, increased the risk of runaway inflation and asset bubbles that could destabilize financial markets.

None of these fears came true. On the contrary, under Bernanke and Yellen – and later under Powell – the Fed’s more difficult challenge was to raise inflation only to the Fed’s annual target of 2%. This still has to be done consistently.

Yellen, a Democrat, had only served a four-year term as Fed chairman when President Donald Trump decided to replace her with Powell, a Republican. This move broke a four-decade long tradition of presidents allowing Fed chairmen to serve at least two terms, even if previously nominated by an opposing party president.

Biden had said last week that his election as Secretary of the Treasury would « be someone I think will be accepted by all elements of the Democratic Party who move forward through the moderate coalition. ”

Yellen has the support of many progressive groups, said Jeff Hauser, executive director of the Revolving Door Project, a left-wing organization. Yellen is a labor economist and an expert on unemployment, an issue that could pose a challenge to the Biden government as unemployment is still high 6. 9% as the economy struggles to recover from the pandemic recession.

During her tenure as Fed chair, the central bank began to shift much of its policy focus from fighting decades-dormant inflation to trying to maximize employment, the second of its two Congressional mandates. Yellen was recognized for its attention to disadvantaged groups, including the long-term unemployed. She visited numerous employment training centers to highlight the need for training programs to equip people for good jobs.

After addressing the issue of climate change this year, Yellen approved a carbon tax to reduce greenhouse gas emissions.

When she left the Fed in early 2018, Shawn Sebastian, co-director of the Fed-Up coalition, a collection of progressive groups, described Yellen’s departure as a « loss to working people across the country. « He applauded their efforts to » embrace economic inequality, racial differences in the economy, the role of women in the workplace and the need for diversity at the Fed. ”

However, some progressives also criticized Yellen for the Fed’s decision in December 2015 to raise the key rate from close to zero, where it had been anchored since late 2008 in the middle of the financial crisis. This rate hike, which caused the dollar value to soar, helped slow U down. S.. . Economic growth in 2016 and is now viewed as premature by many economists.

After leaving the Fed, Yellen became a respected scholar at the liberal Brookings Institution in Washington. She initially did not comment on Trump’s decision not to offer her a second term. However, in a 2019 interview, Yellen said she doesn’t think Trump has a tight grip on economic policies « or even knows the Federal Reserve’s mandates » to stabilize prices and maximize employment.

Yellen is married to George Akerlof, a Nobel Prize-winning economist whom she met in a Fed cafeteria in 1977. You have a son, Robert, who is an economics professor.

Would you like to bookmark your favorite articles and stories for later reading or reference? Start your Independent Premium subscription today.

Janet Yellen, Joe Biden, Federal Reserve System, Chairman of the United States Federal Reserve