US President-elect Joe Biden has chosen former Federal Reserve Chair Janet Yellen to serve as treasury secretary, a pivotal role in which she would help shape and direct his economic policies at a perilous time, according to a person familiar with the transition plans.
Yellen, who is widely admired in the financial world, would be the first woman to lead the Treasury Department in a line stretching back to Alexander Hamilton in 1789.
Her nomination was confirmed to The Associated Press by a person who spoke on condition of anonymity to discuss Biden’s plans.
As treasury secretary, Yellen would face a shaky US economy, weakened by the pandemic recession and now in the grip of a surging viral epidemic that is intensifying pressure on businesses and individuals.
Concern is rising that the economy could slide into a “double-dip” recession this winter as states and cities reimpose restrictions on businesses and consumers stay at home to avoid contracting the disease.
A path-breaking figure in the male-dominated economics field, Yellen, 74, was also the first woman to serve as Fed chair, from 2014 to 2018.
She later became an adviser to Biden’s presidential campaign in an unusual departure for a former Fed leader that thrust her into the political arena.
The treasury post would add another new chapter to Yellen’s broad and varied career in financial policymaking.
As secretary, she would represent the administration in global financial affairs and lead a sprawling department whose responsibilities range from the government’s finances and tax collections to global currency markets, bank regulation and the printing of money.
She would also be a key adviser to Biden and a public spokesperson for his economic agenda.
Yellen should enjoy the advantage of having already built long-standing ties to many of the Fed’s policymakers, notably Jerome Powell, who worked closely with her on the Fed’s board and later succeeded her as chair.
The health of the economy hinges in part on a close coordination between the Fed, an independent agency, and the Treasury, a presidential Cabinet department, especially during major crises like the pandemic recession that struck in early spring.
Soon after that crisis erupted, the government established a suite of lending programs that were designed to shore up businesses and municipalities and that involve a partnership between the Treasury Department and the Fed.
After leaving the Fed, Yellen became a distinguished fellow in residence at the liberal Brookings Institution in Washington.
She did not initially comment about Trump’s decision not to offer her a second term.
But in a 2019 interview, Yellen said she didn’t think Trump had a firm grasp of economic policy “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.
They have one son, Robert, who is an economics professor.
AP