In selecting former Federal Reserve Chair Janet Yellen to head the Treasury Department, President-elect Joe Biden followed through on his campaign pledge to break precedent and build a diverse executive branch. If approved by the Senate, Yellen, 74, would be the first woman to hold the Cabinet-level position of secretary of the Treasury.
The speculation over whom Biden would choose to lead the Treasury Department had been particularly intense after he said he would choose a history-making appointee — leading many to speculate that he would choose either a Black or a female nominee to be the Treasury’s 78th chair.
If confirmed, this will not be Yellen’s first time breaking the glass ceiling at the highest level of economic policymaking. Yellen was the first woman to chair the Fed when she succeeded Ben Bernanke in 2014, after having served as vice chair since 2010. During her four-year tenure at the Fed, Yellen supported the economic recovery through accommodative monetary policy and backing low interest rates.
Yellen’s appointment requires Senate confirmation. Her Fed nomination was approved with bipartisan backing, and she is widely viewed now as a choice that is acceptable to lawmakers of both parties. Following the announcement Monday afternoon, Gary Cohn, President Donald Trump's first National Economic Council director, tweeted his support of Yellen, calling her “an excellent choice” and saying, “I have no doubt she will be the steady hand we need to promote an economy that works for everyone, especially during these difficult times.”
Economic policy experts say Yellen will have her work cut out for her: The Covid-19 pandemic has sent the United States plunging into the fastest and steepest economic downturn since the Great Depression, and surging case numbers are prompting renewed shutdowns, foreshadowing more economic pain ahead.
The outgoing administration could make rectifying this situation more difficult for Yellen: Treasury Secretary Steven Mnuchin provoked rare criticism from central bank officials when he announced last week that funding for emergency Fed programs to stabilize small- and medium-size businesses would be cut off at the end of the year, a move Biden allies charged was calculated to hamstring the president-elect’s ability to counteract the economic devastation of the pandemic without protracted congressional wrangling.
Biden also faced pressure from the left flank of the Democratic Party to choose a treasury secretary with roots in academia or government, rather than someone from the private sector. Last Thursday, Biden characterized his selection as “someone who I think will be accepted by all elements of the Democratic Party ... progressive to the moderate coalitions” — a statement many observers interpreted as a hint that Yellen would be his choice.
Although new to the Treasury, the Brooklyn-born Yellen would, in many ways, be on familiar ground. A Yale Ph.D graduate, she has a history of economic policymaking that stretches back decades, including a stint as president of the San Francisco Fed from 2004 to 2010, chair of the Council of Economic Advisers under Bill Clinton from 1997 to 1999, and a Fed governorship from 1994 to 1997. Since stepping down as Fed chair in 2018, Yellen has worked as an economist at the Brookings Institution.