Nov 23, 2020 - Economy

Biden to nominate Janet Yellen as Treasury secretary

Janet Yellen

Photo: Photo by Alex Wong/Getty Images

President-elect Joe Biden is preparing to nominate former Fed Chair Janet Yellen as his Treasury Secretary, four people familiar with the matter tell Axios.

Why it matters: Yellen, 74, will bring instant economic celebrity to Biden’s team and, if confirmed, she will not only be the first female Treasury Secretary but also the first person to have held all three economic power positions in the federal government: the chair of Council of Economic Advisers, the chair of Federal Reserve and the Treasury Secretary.

  • The Wall Street Journal was first to report that Biden will nominate Yellen for the position.
  • An official with Biden's transition team declined to comment.
  • The stock market jumped on the news, with the Dow rising more than 380 points.

The big picture: Yellen’s experience will be critical in helping steer the country out of an economic crisis — one where the Federal Reserve and the Treasury Department have (until recently) worked hand in hand to develop unprecedented Fed stimulus programs.

  • Yellen was nominated as Fed chair in 2013 by President Obama. She was the first woman to head the Fed. Under her watch, the Fed hiked interest rates for the first time after a nearly a decade of near-zero interest rates. President Trump replaced Yellen with Jerome Powell in 2018.
  • She was head of the Council of Economic Advisors under President Bill Clinton from 1997-1999, before serving as president of the Fed’s San Francisco branch and then serving as Vice Chair of the Federal Reserve.
  • Yellen has been a fellow at the Brookings Institution since 2018.

President Trump’s former National Economic Council director, Gary Cohn, praised Biden’s choice, tweeting, "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."

Between the lines: In selecting Yellen, Biden has decided to keep Fed Governor Lael Brainard on the central bank, avoiding a vacancy that her departure would have triggered and keeping her viable to replace Powell when his chairmanship ends in 2022.

  • After the Senate failed to confirm Judy Shelton, a Trump nominee, to the board of governors, Biden’s team grew increasingly concerned that Republicans might retaliate against their Fed nominees.
  • The Biden team also wants to find a role for Roger Ferguson, the CEO of the Teacher Insurance and Annuity Association, but is concerned about losing Democratic senators in a potential confirmation fight over someone with Wall Street ties.

Go deeper: Biden transition names first Cabinet nominees

Editor's note: This story has been updated throughout.

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