Janet Yellen confirmed as first female Secretary of the Treasury in U.S. history

Former Federal Reserve Chairman Janet Yellen was confirmed as Treasury secretary on Monday, with the Senate voting 84-15 to make her the first woman to head the department.

Yellen comes into the role with a few advantages: She is well known and respected among lawmakers on both sides, and she has experience of enormous economic challenges. Yellen was expected to be easily confirmed after his nomination was passed by the Senate Banking Committee in a 26-0 vote on Friday.

Yellen, originally from New York, received his doctorate. from Yale University and taught at Harvard University, the London School of Economics and the University of California, Berkeley, in addition to holding numerous positions at the Fed before becoming the first woman to lead of its history in 2014.

“As chairman of the Federal Reserve, Yellen has worked to build constructive relationships with members of the House and Senate,” said Mark Hamrick, senior economic analyst at Bankrate. “In this position, it was important to avoid crossing certain political lines.”

Yellen’s role is inherently political – meaning she’ll have to thread a needle when engaging with lawmakers.

“The less overtly political Yellen, the more credibility it will have in the financial markets,” said Stephen Myrow, managing partner of policy research consultancy Beacon Policy Advisors.

Yellen’s tenure is sure to be a marked departure from that of his predecessor Steven Mnuchin, the investment banker who oversaw the Treasury under former President Donald Trump.

Yellen, the product of a middle-class education in New York City’s Brooklyn neighborhood, cited the critical – though often invisible – role macroeconomic principles play in the daily well-being of American families. At the Treasury Department, she should target the roots of the country’s growing inequality, as well as the factors that make it worse.

Yellen spoke about economic inequality and the “K” recovery during his hearing before the Senate Banking Committee, making the economic argument that facilitating wider access to financial stability does not just benefit individual Americans, but that it also strengthens the economy as a whole. .

“It will be its job to help put in place the next round of economic stimulus, or relief legislation, with its high price tag putting pressure on members of the Senate,” Hamrick said.

Mark Zandi, Chief Economist at Moody’s Analytics, said: “Secretary Yellen will focus on using strong fiscal policy to support strong economic growth that will benefit even the most struggling low-income and minority households. It has long championed the distribution of income and wealth, and now it can act on it. “

She is also expected to champion President Joe Biden’s other long-term political goals, such as increasing green energy production. Yellen, a member of the Climate Leadership Council, an international political institute, has expressed support for a carbon tax and testified before Congress on an economic rationale for reducing greenhouse gas emissions.

Yellen will work closely with current Fed Chairman Jerome Powell to help support the fragile recovery, which has started to flash warning signs as the pandemic continues to spiral out of control in many parts of the country.

Political observers say its oversight of the Fed during a critical part of the economic recovery from the Great Recession will serve it well as the pandemic continues to weigh on the labor market and economic activity, as does the support it receives. has grown across the political spectrum – a rare commodity in a polarized Washington.

Since the early days of the pandemic, Powell’s Federal Reserve has used its power to stabilize the financial system. Economists widely agree that the interventions saved markets from a potentially catastrophic collapse in the spring – but there are limits to what the Fed can achieve with monetary policy, a point Powell has repeatedly made, as well as increasingly dire warnings for lawmakers about the and long-term consequences of not acting quickly on fiscal stimulus legislation.

At the Treasury Department, Yellen will be able to lobby a heavily divided Congress more directly.

“The Secretary of the Treasury’s most powerful tool is the Bully’s Chair. For this to be effective, however, the Secretary of the Treasury needs to have credibility,” Myrow said. “I think the strong bipartisan support her appointment has received, despite the hyperpartisan environment, is a testament to the reservoir of credibility she brings with her in this role.”