The return of Janet Yellen

Janet Yellen, the former US central-bank chief is back, this time as US Treasury secretary. Donald Trump wondered whether she was too short for the job – she is now seen as a towering figure.

“Given a fair shot and equal chance, there’s nothing beyond the capacity of the American people,” said US president-elect, Joe Biden, when introducing his new economic team. Janet Yellen personifies that vision, says The Wall Street Journal. Having made history in 2014 when she became the first woman to lead the US Federal Reserve, she has now smashed two more glass ceilings – becoming not just the first female US Treasury secretary, but also the first person to achieve the holy trinity of heading the Treasury, the central bank and the White House Council of Economic Advisers.

The human touch

The 74-year-old economist has pledged to run “an institution that wakes up every morning” thinking about people’s jobs, paycheques, struggles, hopes and dignity, says The New York Times. “A famed labour economist”, Yellen observed that growing up in “working-class Brooklyn” had shaped her. Her mother, Anna, was a junior school teacher; her father, Julius, was a family doctor in a neighbourhood of poor European immigrants. “I heard very often when I was growing up what it meant to family life when someone lost a job.”

Fans credit Yellen with broad-mindedness, arguing she brings “a human touch” to decisions. “She understands the economics, she understands the politics, she has empathy and a deep understanding of social problems,” says former European Central Bank president Mario Draghi. “It’s very, very, rare to find that combination.” But it was her “brainy side” that shone early on, says the Financial Times. Top of her class, Yellen edited her high school newspaper – in one edition conducting “a witty interview with herself”. At Brown University, she fell in “love at first sight” with economics, later studying for a doctorate under James Tobin, “a master of Keynesianism”, at Yale.  

Ditching academia for her first job on the Fed staff in 1977, Yellen met her husband, economist and later Nobel laureate, George Akerlof, in the cafeteria. “Not only did our personalities mesh perfectly, but we have always been in all but perfect agreement about macroeconomics,” he once wrote. Early in their marriage, the couple both taught at the London School of Economics before returning to San Francisco in the early 1980s. “I think at the time people underrated her,” LSE professor Lord Desai told the BBC in 2014. “She was ‘just’ George Akerlof’s wife.”

A safe pair of hands

Yellen finally shrugged off the “trailing spouse” moniker in 1994 when she joined the Fed’s board of governors, three years later becoming chair of Bill Clinton’s Council of Economic Advisers. Credited with delivering “early warnings about the credit crunch”, she took the top Fed job in 2014 under Barack Obama, says The Economist. Her subsequent rejection by Donald Trump (who reportedly questioned whether 5ft 3in Yellen was “too short” for the job) was at odds with her performance – “the Yellen Fed found a decent balance”.

Often described as unflappable, she has long been seen as a safe pair of hands. Yet Yellen has also “quietly achieved rock star status” among a younger generation far removed from economic and political circles, says The New York Times. In 2014, she was “mocked” for wearing the same outfit to both her White House nomination and her confirmation hearing. “At least we know her mind won’t be preoccupied with haute couture,” wrote one waspish gossip columnist. Suffice to say, no one disses Janet Yellen like that anymore. 

Recommended

Short squeeze
Glossary

Short squeeze

When a large number of short sellers target the same stock, the price can rise in a self-perpetuating circle known as a 'short squeeze'.
6 Dec 2021
Cost/income ratio
Glossary

Cost/income ratio

The cost-to-income ratio is a key financial measure, particularly important in valuing banks...
6 Dec 2021
Has the “jam tomorrow” bubble popped already?
Stockmarkets

Has the “jam tomorrow” bubble popped already?

Fund managers have had a good year so far. John Stepek looks at what to expect from markets until year end.
6 Dec 2021
Three stocks that should profit from the dash for digital growth
Share tips

Three stocks that should profit from the dash for digital growth

Professional investor Christopher Versace of the Digital Infrastructure and Connectivity UCITS ETF picks three digital growth stocks to buy now.
6 Dec 2021

Most Popular

Bubbles grow in global property markets as house prices continue to rise
Property

Bubbles grow in global property markets as house prices continue to rise

House prices grew by 6% in the year to mid-2021 in 25 global cities, with the German property market in particular showing signs of overheating.
3 Dec 2021
Investing in time
Sponsored

Investing in time

SPONSORED CONTENT – Watch collecting can be addictive and expensive, but it can also be a very sound investment strategy
3 Dec 2021
Three safe bets on the growing online gambling sector
Share tips

Three safe bets on the growing online gambling sector

Professional investor Aaron Fischer, creator of the Fischer Sports Betting and iGaming ETF, picks three of his favourite online gambling stocks.
29 Nov 2021