Janet Yellen (b. 1946)
Who They Were
Janet Yellen (b. 1946) is an American labor economist who in 2014 became the first woman to chair the Federal Reserve, serving until 2018. Before leading the Fed she had been president of the Federal Reserve Bank of San Francisco and vice chair of the Board of Governors during the crisis-era asset purchase programmes. Succeeding Ben Bernanke, she inherited what she called the harder half of the problem: how to unwind the extraordinary support put in place during the 2008 crisis. Under her chairmanship the Fed raised interest rates in December 2015 for the first time in nearly a decade and began normalising its balance sheet in 2017. After leaving the Fed she became U.S. Treasury Secretary, the only person to have led the Federal Reserve, the Treasury, and the Council of Economic Advisers.
Key Contributions
Yellen is remembered for beginning the careful exit from the emergency policies of the financial crisis.
- Oversaw the first federal funds rate increase in nearly ten years, in December 2015, lifting rates off the zero-to-0.25 percent range set in December 2008.
- Launched the Fed's first quantitative tightening in October 2017, allowing a capped amount of maturing securities to roll off each month so the balance sheet could shrink passively.
- Sought to make the process predictable and undramatic, describing the intention as making it as boring as watching paint dry.
A labor economist by training, she paid close attention to employment and wages in setting policy. Her measured normalisation aimed to tighten without disrupting markets, though by September 2019 strains in short-term funding markets showed reserves had fallen further than expected.
On EconRecall
The first woman to chair the Federal Reserve (2014-2018), who began unwinding crisis-era policy and later became Treasury Secretary. Play the games that feature Janet Yellen: