RISKY BUSINESS JANET YELLEN TAKES CHARGE OF THE FEDERAL RESERVE
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Janet L. Yellen took the reins as chair of the Federal Reserve Bank from outgoing chair Ben Bernanke in February, making her the first woman to hold the post in the Fed’s century-long history. The job is arguably the most influential economic policymaking job on the planet. And although economics remains a male-dominated field, it is hard to imagine anyone having better credentials than Yellen for the post. And while her job requires her to dwell in the esoteric and mysterious world of monetary policy, she said she never forgets the goal of her work is to improve the lives of everyday Americans. “The mandate of the Federal Reserve is to serve all American people, and too many Americans still can’t find a job and worry how they will pay their bills and provide for their families,” she said at the White House after being nominated to be Fed chair. “The Federal Reserve can help if it does its job effectively.” Yellen, 66, comes to her new job after a long career as an economist and more than a decade in top positions at the Fed, including three years as vice chairman. In that time, she has earned a reputation for having sound judgment and a keen understanding of the Fed’s mandate, which is frequently in tension: to keep inflation under control while lowering unemployment and stoking economic growth. “Dr. Yellen’s experience is unmatched,” Sen. Tim Johnson, a South Dakota Democrat who chairs the Senate Banking Committee, said before Yellen’s confirmation. “She currently serves as a member and vice chair of the Board of Governors; she previously served as a member of the Board of Governors in the 1990s; she was the chair of President Clinton’s Council of Economic Advisors; and she served six years as president of the San Francisco Fed.” Beyond that, Johnson noted, Yellen has an impressive academic record. She has been a professor at Berkeley’s Haas School of Business. Previously, she was a professor at Harvard University, as well as a faculty member at the London School of Economics. She is a summa cum laude graduate from Brown University, and she received her Ph.D. in economics from Yale University, where she was the only female candidate in her doctorate class of two dozen. “Dr. Yellen has written numerous research papers on
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Janet Yellen, chair, Federal Reserve Bank
the labor market, unemployment, monetary policy, and the economy. Her expertise in these areas, including her understanding of the relationship between Fed policy and the labor market, would be valuable as we chart the course back to full employment,” Johnson added. President Obama called Yellen’s appointment “one of the most important economic decisions that I’ll make as president—[and] one of the most important appointments that any president can make—because the chair of the Fed is one of the most important policymakers in the world, and the next chair will help guide our economy after I’ve left office.” Yellen steps into this pivotal role running the nation’s central bank at a particularly risky moment. In the wake of the recession, the Fed has kept interest rates close to zero, which has put pressure on savers dependent on normal interest rates and even pension funds whose liabilities, under accounting rules, go up when rates are down. In addition, the Fed has pumped trillions of dollars into the economy to keep interest rates low in hopes of stimu-
WOMENOFCOLOR | SPRING 2014
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