November 23, 2020
By Trevor Hunnicutt and David Lawder
WILMINGTON, Del./WASHINGTON – (Reuters) – U.S. President-elect Joe Biden is expected to tap former Federal Reserve Chair Janet Yellen as U.S. Treasury Secretary, putting a woman in the job for the first time, according to two Democratic allies.
With Yellen, 74, Biden has chosen an experienced policymaker respected by Congress, international finance officials, progressives and business interests, and one that has called for opening fiscal spending taps to boost economic recovery.
A spokesman for Biden’s transition team declined to comment. Yellen, reached by phone, also declined to comment. The Wall Street Journal earlier on Monday reported that Biden planned to nominate Yellen as his Treasury chief.
Jen Psaki, a Biden transition adviser, tweeted https://twitter.com/jrpsaki/status/1330981299365011462?s=21 that the president-elect “looks forward to announcing some members of his economic team early next week who will work with him to build the economy back better.”
Earlier on Monday, Biden tapped veteran diplomat Antony Blinken as his new Secretary of State and named other members of his national security team.
U.S. President Donald Trump continues to dispute without evidence Biden’s victory over him in the Nov. 3 election.
STRONG ADVOCATE OF FISCAL HELP
Yellen has called for increased government spending to boost the U.S. economy out of a deep recession brought on by the coronavirus and has frequently cited growing economic inequality in the United States as a threat to America’s values and its future.
At Treasury, she would have a major role in influencing U.S. fiscal and tax policy, tools she did not have at the Fed, which she chaired from 2014 to 2018. She was the Fed’s vice chair from 2010 to 2014.
Yellen was chosen over two other seasoned economic policymakers, including current Fed Board of Governors member Lael Brainard, 58, who served as the Treasury’s undersecretary for international affairs early in the Obama administration. Also under consideration was former Fed governor Roger Ferguson, 69, who recently announced his retirement as chairman of pension fund TIAA.
Ferguson would have been the first Black Treasury secretary.
U.S. stocks picked up ground following the report, with investors seeing Yellen as a force for more fiscal action to combat the economic crisis unleashed by the COVID-19 pandemic, and as someone in a strong position to ensure the Treasury will continue to work closely with the Fed.
“Yellen should be a very strong advocate for more aggressive fiscal policy, and given her gravitas around Washington, it may make her the single most effective fiscal expansion advocate Biden could have picked,” said Tom Graff, head of fixed income at Brown Advisory in Baltimore.
The S&P 500 Index rose from roughly unchanged on the day at the time of the initial report to gain 0.57% by the closing bell. Prices of U.S. Treasury securities remained lower on the day. The dollar was little changed.
Massachusetts Senator Elizabeth Warren, a rival to Biden for the Democratic nomination for president and also considered a possibility for the Treasury post, tweeted that Yellen would be “an outstanding choice’ and praised her for having ‘stood up to Wall Street banks” as Fed chair.
“Experience, knowledge of the system, and a deep understanding of monetary policy – she brings a lot to the table,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “And having an intimate knowledge of how the Fed works and bringing that to the Treasury, it’s a good move.”
Current Fed Chair Jerome Powell served as a member of the Board of Governors through all four years of Yellen’s term as head of the Fed, and he succeeded her in 2018.
The daughter of a family doctor and elementary school teacher in Brooklyn, New York, Yellen earned a doctorate in economics from Yale and has taught economics at the University of California, Berkeley, Harvard University and the London School of Economics (LSE).
(Reporting by David Lawder and Trevor Hunnicutt; Additional reporting by Tim Ahmann, Eric Beech, Jonnelle Marte, Kate Duguid and Stephen Culp; Editing by Mohammad Zargham and Andrea Ricci)