Janet Yellen To Lead Pandemic Recovery

Janet Yellen smashes the glass ceiling and makes history as the first woman nominated to run the US Department of Treasury.

Janet Yellen made it her business to smash glass ceilings. The first woman to chair the US Federal Reserve (2014-2018), in late November she was nominated to be the nation’s first female secretary of the Treasury.

Two of the immediate tasks facing Yellen—assuming she is confirmed by the US Senate—will be to jump-start the nation’s economic recovery and to fight economic inequality, particularly the growing income gap between rich and poor.

Trained as a Keynesian economist, Yellen isn’t averse to using government to stimulate the economy—which is anathema to some Republicans who may seek to thwart her initiatives, especially if they retain control of the US Senate. As Fed chair, Yellen worried about the impact of policies on workers and was chided for using the Fed to help reduce unemployment even at the risk of higher inflation.

Yellen’s openness to Keynesian measures has limits, though; she voiced concern in the past that the US is incurring too much debt. And she enjoys support in parts of the business community because she is predictable and her tenure as Fed chair was widely viewed as a success.

On the government’s Covid-19 response, Yellen praised the early economic stimulus efforts, including enhanced unemployment insurance and the Paycheck Protection Program “that helped unemployed workers and their families, together with many businesses, survive the spring shutdowns.” However, as she observed in October, government support lapsed in recent months.

 Yellen’s nomination drew wide support both within the Democratic party and outside of it. Progressive US Senator Elizabeth Warren called her “an outstanding choice for Treasury Secretary. She is smart, tough, and principled [and]…stood up to Wall Street banks.”

Emily Roland, co-chief investment strategist at John Hancock Investment Management, said in a statement provided to Global Finance that “having someone with a steady hand, deep experience, and expert knowledge of the jobs market is something investors may take comfort in.”