On November 30, 2020, President-electJoe Biden nominated Yellen to serve as secretary of the treasury; she was confirmed by theU.S. Senate on January 25, 2021, and was sworn in by Vice PresidentKamala Harris the following day.[3]
Yellen was born on August 13, 1946,[4] to a family ofPolish Jewish[5] ancestry in theBay Ridge, Brooklyn, neighborhood of New York City, and grew up there.[6] Her mother was Anna Ruth (née Blumenthal; 1907–1986), an elementary school teacher who gave up her teaching job to become a stay-at-home mother. Her father was Julius Yellen (1906–1975), a family physician who worked from the ground floor of their house. Janet has an older brother, John (born 1942), who is a program director for archaeology at theNational Science Foundation.[7][8]
In a speech at thePOLIN Museum of the History of Polish Jews, Yellen said that her father's family immigrated to the United States fromSokołów Podlaski, a small town about 50 miles outside of Warsaw. She said further that nearly the entirety of its Jewish population, including many of her relatives, was deported or murdered duringthe Holocaust.[9]
Yellen attended the localFort Hamilton High School, where she was anhonor society member and participated in the booster club, the psychology club, and the history club.[8] She also served aseditor-in-chief ofThe Pilot, the school newspaper, which continued its 13-year streak as the first-place winner of the prestigiousColumbia Scholastic Press Association contest under her leadership.[10] She earned aNational Merit commendation letter and was admitted to a selective science honors program atColumbia University to voluntarily study mathematics on Saturday mornings. Yellen was one of 30 students to win state Regents scholarships for college and one of a select few to win the mayor's citation for a scholarship.[10] She graduated in 1963 as thevaledictorian of her class. In line with school tradition, for the editor to interview the valedictorian, sheinterviewed herself in the third person.[11][8][10]
Yellen enrolled atPembroke College in Brown University, initially intending to study philosophy. During her freshman year, she switched her planned major to economics and was particularly influenced by professorsGeorge Herbert Borts andHerschel Grossman.[12] In the spring of 1964, she also joined the business staff ofThe Brown Daily Herald, but soon afterward she left the paper to focus on her academic studies.[13] Yellen graduatedsumma cum laude andPhi Beta Kappa with abachelor's in economics fromBrown University in 1967,[14] and earned hermaster's andPhD in economics fromYale University in 1971.[15] Her dissertation was titledEmployment, Output and Capital Accumulation in an Open Economy: A Disequilibrium Approach under the supervision ofJames Tobin,[16] a noted economist who would later receive the Nobel Memorial Prize.[17] As a teaching assistant, Yellen was so meticulous in her note-taking during Tobin's macroeconomics class that her notes became the unofficial textbook and were referred to as "Yellen Notes" while being circulated among generations of graduate students.[17] Her former professor and Nobel Prize in Economics laureate,Joseph Stiglitz, has called her one of his brightest and most memorable students.[18] She later described Yale professors Tobin andWilliam Brainard as "lifelong mentors" who laid the intellectual groundwork for her economic views.[19] Yellen was the only woman among the two dozen economists who earned their doctorates from Yale in 1971.[18]
After receiving her Ph.D., Yellen obtained the position of assistant professor of economics atHarvard University, where she taught from 1971 to 1976.[20] At that time, she was one of only two female faculty members in Harvard's economics department; the other woman wasRachel McCulloch. The pair struck up a close friendship and went on to write several academic papers together.[18] In 1977, Yellen took a job within the Federal Reserve's Board of Governors after failing to wintenure at Harvard; she was recruited as a staff economist for the Board of Governors byEdwin M. Truman, who had known her from Yale. Truman was a junior professor when he heard Yellen's oral exam and was then about to take over the Fed's Division of International Finance. She was assigned to research international monetary reform.[21]
While at the Fed, she met her husband, economistGeorge Akerlof, in the bank's cafeteria; they married in 1978, less than a year later.[21] By the time of their marriage, Akerlof had already accepted a teaching position at theLondon School of Economics (LSE). Yellen left her post at the Fed to accompany him and was given a tenure-track lectureship by LSE. The couple stayed in the United Kingdom for two years before returning to the United States, in part due to identity issues because they felt American, not English.[22]
In 1980, Yellen joined the faculty of theUniversity of California, Berkeley, where she taught at theHaas School of Business to conductmacroeconomics research and teachundergraduate andMBA students for more than two decades. She earned the Haas School's outstanding teaching award twice, in 1985 and 1988.[23] Yellen became just the second woman at Berkeley-Haas to earn tenure in 1982, as well as the title of full professor in 1985.[23] She was named the Bernard T. Rocca Jr. Professor of International Business and Trade in 1992.[24][25]
From 1994 to 1999, Yellen took aleave of absence from Berkeley to go into public service. After returning to academia, she resumed her teaching assignment at Haas and received a joint appointment with Berkeley's Department of Economics.[26] She was appointed the Eugene E. and Catherine M. Trefethen Professor of Business Administration and Professor of Economics in 1999[24] and remained an active faculty member until she was appointed president and chief executive officer of theFederal Reserve Bank of San Francisco in 2004.[27] Yellen was awarded the title of professor emeritus at UC Berkeley in 2006.[25]
Throughout her career, Yellen served as an adviser to theCongressional Budget Office (CBO), the Brookings Panel on Economic Activity, and theNational Science Foundation's Panel in Economics. She was also a research associate at theNational Bureau of Economic Research from 1999 to 2010.[25] In 2025, she joined the board of advisors for Angeleno Group, a private equity and venture capital firm focused on sustainable energy investments.[28]
Yellen's academic career has largely focused on the analysis of the mechanisms of unemployment and labor markets, monetary and fiscal policies, and international trade. She has written a few widely cited papers, often collaborating on research with her husband, Professor George Akerlof.[29][30]
Since the 1980s, Yellen and Akerlof have addressed what's known in the economics literature as "efficiency wage theory" – the idea that paying people more than the market wage does increase their productivity. Their 1990 paper, entitled "The Fair-Wage Effort Hypothesis and Unemployment", coined "the fair wage effort hypothesis" and was considered by economists to be a significant contribution to the topic: "A precursor to the efficiency wage literature...it had an influence, although the work on efficiency wage theory has had a bigger influence."[31] Akerlof and Yellen introduced thegift-exchange game, which argues that workers who are paid less than what they consider to be a fair wage will purposefully work less hard to exact revenge on their employer.[31][29]
Another work, "An Analysis of Out-of-Wedlock Childbearing in the United States", co-written with Akerlof and Michael Katz and published in 1996, aims to explain whyout-of-wedlock births have grown considerably in previous decades in the United States. A research study led to a theory called "reproductive technology shock", arguing that the increased availability of both abortion and contraception in the late 1960s and early 1970s, amidst thesexual revolution, eroded the social norms surrounding sex, pregnancy, and marriage, leading to a sharp decline in the stigma of unwed motherhood.[32] At the same time, this transformation encouraged biological fathers to reject notions of marital and paternal obligations.[33]
On April 22, 1994, PresidentBill Clinton announced his intention to nominate Yellen as a member of theFederal Reserve Board of Governors, alongsideAlan Blinder, who has been designated as vice chairman. They were the firstDemocratic appointees to the Board since 1980.[34][35] In an issued statement, the president praised her as "one of the most prominent economists of her generation on the intersection of macroeconomics and labor markets."[36] President Clinton played an indirect role in the selection process, delegating most of the responsibility to NEC DirectorRobert Rubin, Treasury SecretaryLloyd Bentsen, and CEA ChairLaura Tyson, who was a colleague of Yellen's at Berkeley. The group settled on her candidacy after an exhaustive search that at one point included nearly 50 names.[34] In July 1994, during her confirmation hearing before theSenate Banking Committee, Yellen said that Fed policies should keep the economy growing as much as possible without accelerating inflation but avoid taking a clear position on the prospect of further increases ininterest rates.[37] The Senate panel approved her nomination without muchRepublican opposition, by a vote of 18 to 1; the only dissenting vote came from SenatorLauch Faircloth (R-NC), who said that her concerns should be limited to inflation.[38] The nomination was confirmed in the fullUnited States Senate by a vote of 94–6.[39] On August 12, 1994, Yellen was appointed to a full 14-year term and assumed the seat vacated by RepublicanWayne Angell.[38] She was installed as the fourth female governor, joiningSusan M. Phillips, which marks the first time that two women have sat on the Federal Reserve Board simultaneously.[40]
In July 1996, the Federal Reserve resisted pressure to raise interest rates as unemployment dropped. Yellen marshaled academic research to dissuade ChairmanAlan Greenspan from committing the Fed to a zero inflation policy and demonstrate that thecentral bank should seek to moderate inflation rather than eliminate it. According to the study, a low inflation rate of around 2 percent provided a better foundation for reducing unemployment and increasing economic growth than the goal of zero.[41]
Upon her confirmation as chair of the Council of Economic Advisers, she resigned as a member of the Board of Governors of the Federal Reserve System on February 17, 1997.
On December 20, 1996, Yellen joined theClinton administration as chair of President Clinton'sCouncil of Economic Advisers (CEA), replacing Joseph Stiglitz in office.[42] She was reluctant to leave the Federal Reserve, but White House officials talked her into a job, passing over others with greater marquee value because, as Treasury Secretary Robert Rubin said, "We wanted someone who could bring a rigorous analytic approach to the issues and who could work well with others."[43] Yellen was unanimously confirmed by the Senate on February 13, 1997,[44] thereby becoming the second woman to serve as chief economic advisor to the president after Laura Tyson.[45][43] While serving within the Administration, she concurrently chaired theOECD Economic Policy Committee from 1997 to 1999.[25]
During her time with the Council of Economic Advisers, Yellen oversaw a June 1998 report, "Explaining Trends in the Gender Wage Gap",[46] which focused on the gender pay divide. Within this study, the Council analyzed data from 1969 to 1996 to determine the reasons why women earn substantially less than men. By observing trends attributable to issues such as occupation and industry, as well as familial status, it was determined that while theEqual Pay Act of 1963 was a step forward, there was no explanation for a 25-percent difference between average pay for women and men – an improvement from the 40-percent gap two decades earlier. It was concluded that this gap had no correlation with differences in productivity and, as such, was the result of discrimination within the workforce.[18]
In June 1999, Yellen announced that she was stepping down from the CEA for personal reasons and would return to teaching at UC Berkeley.[47] It was reported that President Clinton asked her to take over fromAlice Rivlin, the central bank's vice chairwoman – an offer she turned down.[48]
On April 12, 2004, the Federal Reserve announced that Yellen would replace Robert T. Parry as president and chief executive officer of theFederal Reserve Bank of San Francisco, taking office on June 14.[49] She was the first woman to hold this position.[18] While serving as Federal Reserve District president, she sat on the policy-settingFederal Open Market Committee (FOMC) and was a voting member once every three years on a rotating basis, with her first being in 2006.[49] During her time at the San Francisco Fed, the largest of the 12 Federal Reserve Banks in terms of population and economic output, Yellen publicly downplayed concerns about the potential consequences of the boom in housing prices; at FOMC meetings, on the contrary, she sounded the alarm on banks' heavy concentration inrisky construction and home-development loans.[50] On the other hand, she did not lead the San Francisco Fed to "move to check [the] increasingly indiscriminate lending" ofCountrywide Financial, the United States' largest lender.[51][52]
On June 5, 2009, Yellen said that the Federal Reserve should consider raising interest rates earlier to prevent anotherhousing bubble. She argued that higher short-term interest rates probably went against the expansion of a bubble in certain circumstances, like restraining the demand for housing and high-risk mortgages.[53]
In July 2009, Yellen was mentioned as a potential successor to ChairmanBen Bernanke when his term was set to expire before he was re-nominated for a second four-year term.[54] She eventually emerged as the leading contender for vice chair of the Federal Reserve Board in March 2010,[55] and following her Senate confirmation, she resigned from the San Francisco Fed in October of that year.[56]
Yellen takes the oath of office administered by Federal Reserve chairmanBen Bernanke in theEccles Building, October 4, 2010.
On April 28, 2010, PresidentBarack Obama nominated Yellen to succeedDonald Kohn asvice chair of the Federal Reserve.[57] In July 2010, the Senate Banking Committee voted 17–6 to confirm her, though the top Republican on the panel, Sen.Richard Shelby of Alabama, voted no, saying "President Yellen presided over a regional housing bubble and failed to restrain the excesses."[58]
Around the same time, on the heels of related testimony by Fed chairman Bernanke, FOMC voting memberJames B. Bullard of theSt. Louis Fed stated that theU.S. economy was at risk of becoming "enmeshed in aJapanese-style deflationary outcome within the next several years."[59] That statement was interpreted as a possible shift within the FOMC balance between inflation hawks and doves. Yellen's pending confirmation, along with those ofPeter Diamond andSarah Bloom Raskin to fill vacancies, was seen as possibly furthering such a shift in the FOMC. All three nominations were seen as "on track to be confirmed by the Senate."[59]
On September 29, 2010, Yellen, along with Raskin,[60] was confirmed by the Senate on avoice vote to be both a member of the board of governors[61] and vice chairman of the Federal Reserve System.[62] On October 4, the pair were sworn in as Fed governors, while Yellen also took theoath of office as vice chair of the board for a four-year term.[56] Simultaneously, she began a 14-year term as a member of the Federal Reserve Board, filling a vacant seat last held byMark W. Olson.[56] Yellen was just the second woman to hold the Federal Reserve's No.2 post, after Alice Rivlin.[63]
In contrast to her predecessors, Yellen acted more independently within the institution in her role as vice chair.[64] She has been urging Bernanke and the other FOMC members to follow her preferred route for monetary policy, arguing for more forceful actions to inject money into the economy to reduce unemployment.[65] Yellen played a leading role in moving the Federal Reserve to announce its inflation target of two percent a year after her long campaign with Chairman Bernanke; she was an early supporter ofinflation targeting, facing opposition from Chairman Greenspan during her first stint at the Fed in the 1990s.[66][64]
Yellen was widely considered the front-runner to succeed Bernanke as the Federal Reserve's chair when his second term ceased.[66][67][68]Lawrence Summers, a former President Clinton's Treasury Secretary and former director of President Obama'sNational Economic Council, was the other leading contender in the highly publicized race; media outlets reported that the president was leaning toward selecting the latter candidate.[69] However, throughout the race, Summers drew criticism from both sides of the aisle for his role in deregulating parts of the banking sector while he served in the Clinton administration. He sparked further controversy for remarks on women's aptitude in math and science, which he made in 2005 while serving as Harvard University's president.[18] In July 2013, Yellen was pushed to be named the first chairwoman of the central bank in a letter that was circulated among theSenate Democrats and had been signed by almost a third of the 54 caucus senators, who primarily represent the liberal wing of the party.[70] In addition, more than 500 professional economists from around 200 colleges and universities across the United States signed an open letter in support of her candidacy for Fed chair and sent it to the White House.[71] After weeks of opposition to his potential nomination, Summers withdrew his name from consideration for the position in September.[72][73]
On October 9, 2013, Yellen was officially nominated to replace Bernanke aschair of the Federal Reserve,[74][75] the first vice chair ever to be elevated to that post.[76] While announcing his decision, President Obama called her "one of the nation's foremost economists and policymakers" and said that "America's workers and their families will have a champion in Janet Yellen."[77] During the nomination hearings held in November, Yellen defended the more than $3 trillion in stimulus funds that the central bank had been injecting into the U.S. economy.[78] She also said that it is important for the Fed to try to detectasset bubbles and that if she saw one, she would work to address it.[79]
On December 20, 2013, the U.S. Senate voted 59–34 forcloture on Yellen's nomination.[80] On January 6, 2014, she was confirmed as chair of the Federal Reserve by a vote of 56–26,[81] the narrowest margin ever for the position.[82] Yellen was a trailblazer as the first woman to head the U.S. central bank, or anymajor central bank, and the first Democrat to do so sincePaul Volcker assumed that position in 1979 via PresidentJimmy Carter.[1] She was sworn into office on February 3, 2014,[83] and was previously elected as FOMC chair on January 30.[84] According to a Fed representative, on Yellen's request, her title would be altered to "chair" rather than "chairman" or "chairwoman", as she prefers agender-neutral manner.[63][18] Only one woman had ever led the central bank of aG8 country before Yellen – Russia's Elvira Nabiullina.[85]
In July 2014, at her first semi-annual congressional testimony onU S. monetary policy, Yellen said, "while real estate, equities, and corporate bond prices have risen appreciably and valuation metrics have increased they were generally in line with historical norms." She also acknowledged some concerns about the valuations oflower-rated corporate debt and affirmed that she and other Fed officials were monitoring trends but did not believe that a so-called "everything bubble" was forming.[86]
On December 16, 2015, the Federal Reserve under Yellen increased its key interest rate for the first time since 2006.[87] That move was largely expected because extraordinarily low rates for an extremely long time may contribute to financial instability and pose a threat to the economy, and was considered a departure from the previous controversial Fed policy, commonly known as the "Greenspan put".[88][89] During her tenure, the Fed gradually raised rates four additional times, leaving its key rate in a still-low range of 1.25 percent to 1.5 percent – well below historical standards.[90]
Following the2016 presidential election, Yellen gave a strong defense of theDodd–Frank Act in herJoint Economic Committee testimony, standing in opposition to incoming PresidentDonald Trump's plans to review the landmark legislation. She argued that it would be inappropriate to weaken or repeal the law designed to prevent a repeat of the2008 financial crisis.[91] Yellen provided further support for financial regulations enacted in the wake of theGreat Recession in a speech to theJackson Hole Economic Symposium on August 25, 2017. In her remarks about the aftermath of the crisis, she said, "The balance of research suggests that the core reforms we have put in place have substantially boosted resilience without unduly limiting credit availability or economic growth." Yellen warned that any adjustment to the regulatory framework should be modest and preserve the increase in resilience.[92]
In November 2017, as Yellen's tenure as chair of the Federal Reserve was coming to an end, Trump considered nominating her for another term, but on the advice of his Treasury SecretarySteven Mnuchin, he picked a Republican Fed governor,Jerome Powell, instead.[93] Yellen made her resignation from the Federal Reserve Board at the conclusion of her chairmanship known after Trump's choice, despite still having her assignment as Fed governor until 2024.[94] She served a single term and became just the second Federal Reserve chair eligible for reappointment not renominated by a successor presidential administration, the first beingArthur F. Burns almost 40 years prior.[95] That unusual departure makes her the briefest-serving central bank chief sinceG. William Miller, who held that office for over a year, from 1978 to 1979.[96]
On February 2, 2018, Yellen enforced enormous sanctions onWells Fargo, which was thethird-largest U.S. bank at the time, with a consent order restricting the firm's expansion unless it resolved its internal issues.[97][98] That move came in response to a string of "widespread consumer abuses and compliance breakdowns" at the company, particularly afake account scandal,[99] and marked the first time the Fed has imposed a cap on the entire assets of a financial institution.[98]
Regarding labor markets, Yellen has been dubbed one of the Federal Reserve System's most successful chairpersons. During her term, the unemployment rate dropped from 6.7 percent to 4.1 percent, the lowest in 17 years.[100][101][90] For the first time since central bank creation, the economy added jobs throughout every month of any Fed chair's tenure.[101] Yellen completed her time at the Fed with the lowest final unemployment rate of any Fed chair sinceWilliam McChesney Martin in 1970.[102] Under her leadership, the U.S. unemployment rate fell more than during any other chair's term in thepost-World War II era, declining 2.6 percentage points.[102] On the other hand, inflation remained below the Fed's annual two percent target, which led to the suggestion that the central bank could have done even more to bolster the economy without the risk of price increases.[103]
Yellen became the first person in U.S. central bank history to have served as a Federal Reserve chair (2014–2018), vice chair (2010–2014), district president (FRB of San Francisco, 2004–2010), Fed governor (1994–1997 and 2010–2018), and staff economist (1977–1978).[104]
Yellen delivers her farewell speech to Federal Reserve staff, February 1, 2018.
On February 2, 2018, theBrookings Institution announced that Yellen would join the think tank as a distinguished fellow in residence with the Economic Studies program, effective February 5, 2018.[105] She's been affiliated with the Hutchins Center on Fiscal and Monetary Policy at Brookings.[106] On July 31, 2018, the Hutchins Center announced Yellen,James H. Stock, and Louise Sheiner as co-chairs of the newly launched Productivity Measurement Initiative, aimed at improving the quality ofeconomic statistics.[107]
In November 2020, Yellen left her position at Brookings after being selected as a nominee to serve as Treasury secretary.[2] Within the think tank, she has been providing expertise and commentary on a range of economic issues, offering her perspective and analysis at Brookings panels, congressional testimony, lectures across the United States and abroad, and regularly serving as a commentator in the media.[2]
On June 27, 2017, Yellen stated that she did not expect another financial crisis "in our lifetime" because she thought banks were "much stronger" as a result of Federal Reserve oversight.[108] In a December 10, 2018 conversation withPaul Krugman at theCity University of New York, she warned of the possibility of another financial crisis by citing "gigantic holes in the system" after she departs from the Federal Reserve.[109]
On February 25, 2019, in an interview withMarketplace, when asked if she believed Trump has "a grasp of macroeconomic policy," Yellen replied, "No, I do not."[110] She expressed her doubts about the president's ability to articulate the Federal Reserve's explicit goals of "maximum employment and price stability" and emphasized his assertions that the Federal Reserve's goals include trade, which she explains are objectively false. She raised further concern over Trump's regard for the independence of the central bank and voiced support for her successor, Jerome Powell.[110] This interview marked a notable change in tone for Yellen, who traditionally handled her differences with the president in a neutral manner.[111]
In August 2020, it was reported that Yellen was among a handful of economists who briefed former vice presidentJoe Biden, the presumptive Democratic nominee for president, and his chosenrunning mate, Sen.Kamala Harris, on economic issues.[114] The meeting was one of the first times theBiden campaign announced its economic expert, whom few at the time predicted would take apresidential cabinet post.[115]
With her return to government, she pledged to get official permission from theOffice of Government Ethics (OGE) to participate in substantive issues involving such firms to avoid any conflict of interest.[120][119]
On November 30, 2020, then-President-elect Biden announced he would nominate Yellen as Treasury Secretary inhis cabinet.[124][125] In his remarks on the announcement, Biden lauded her as "one of the most important economic thinkers of our time" who "spent her career focused on employment and the dignity of work."[126] Despite being a highly respected figure across the political spectrum and expected to win confirmation easily, she was considered an unusual pick for the position because of her lack of experience in political maneuvering. Unlike her predecessors, she is viewed as more of an academic economist than a traditional politician used to horse-trading and dealmaking, qualities that could be critical to achieving the goals ofBiden's economic agenda in a deeply partisan Congress.[127][128][129] All living former U.S. treasury secretaries, fromGeorge Shultz toJack Lew, endorsed Yellen for the position in a bipartisan letter calling on the Senate to swiftly confirm her.[130]
TheSenate Finance Committee unanimously approved Yellen's candidacy by a 26–0 vote on January 22, 2021.[131] The full U.S. Senate confirmed her nomination with a vote of 84–15 (with oneabstention,Marco Rubio, R-FL)[132] on January 25.[133] With her oath of office administered by Vice President Harris the next day,[134] Yellen became the first female Secretary of the Treasury and the first person in American history to lead the three most powerful economic bodies in thefederal government of the United States: the Treasury Department, the Federal Reserve, and the White House Council of Economic Advisers.[3][133]
Only three other women within theG7 nations – France'sChristine Lagarde, Canada'sChrystia Freeland and the United Kingdom'sRachel Reeves – have held positions analogous to Yellen's as Treasury Secretary.[135] Yellen andLynn Malerba signingcurrency during Yellen's time as Treasury Secretary also marked the first time two women signed U.S. currency.[136]
In April 2021, Yellen proposed aglobal minimum corporate tax rate that would preventprofit shifting by multinational companies fortax avoidance.[137] In an accompanying written piece forThe Wall Street Journal, she outlined the enormous benefits of the discussed tax system for the US economy as well as the global economy.[138] On June 5, 2021, finance ministers from the Group of Seven (G7) agreed to reinstate a minimum worldwide corporate tax rate of at least 15% as part of a landmark deal to modernize the international tax system, whileFrance'sBruno Le Maire called it "a starting point" that could be increased in the future.[139] A few days later, Treasury Secretary Yellen co-wrote an op-ed forThe Washington Post with four of her international counterparts, describing the new agreement as "an historic opportunity to end therace to the bottom in corporate taxation, restoring government resources at a time when they are most needed."[140] The next month, financial leaders from theG20 countries came to an agreement on plans to put an end to globaltax havens, force multinational corporations to pay an appropriate share of tax wherever they operate, and create a "more stable and fair international tax architecture."[141]
In October 2021, more than 130 countries, accounting for more than 90% of globalGDP, including several low-tax jurisdictions that had previously fought the pact, enforced through theOECD a landmark agreement to establish a global minimum tax rate of 15% for businesses worldwide. The projected gain from the deal, which was anticipated to take effect in 2023, would result in an increase of $150billion in annual tax revenues. The treaty's implementation path remained uncertain because itsratification requires a two-thirds majority in the evenly divided U.S. Senate as well as passing domestic legislation in each of the signed countries.[142][needs update]
On July 23, 2021, Yellen sent a letter to House SpeakerNancy Pelosi and other congressional leaders in which she urged lawmakers to increase or suspend thenation's debt limit as soon as possible before it hit its statutory limit in August and the government would be unable to pay its bills. She warned Congress that failing to meet those financial obligations would cause "irreparable harm" to the U.S. economy and that the Treasury Department would take "extraordinary measures" to prevent the United States from suffering agovernment shutdown or even a debt default.[143]
On September 19, 2021, Yellen, in an op-ed forThe Wall Street Journal, again called for an increase in the debt ceiling; otherwise, sometime in October, the Treasury expected to exhaust its cash reserves, which would trigger afinancial crisis.[144] After lawmakers adopted a short-term debt ceiling bill to raise the United States' borrowing limit through early December, she said that a longer-term measure should be provided to ensure certainty in government's solvency.[145] In November, Yellen expressed her willingness to consider solutions to thedebt crisis without GOP support if necessary, using a budgetreconciliation as a viable alternative.[146] She also supported the idea for Democrats to raise the debt limit high enough that it would not be reached until after the2024 general elections while the party holds a majority in both houses of Congress, therefore preventing the issue from being weaponized for political reasons.[147]
In December 2021, President Biden signed a debt ceiling increase into law, preventing a U.S. default, a day after the Treasury's previously estimated deadline to address the issue. Congressional legislation designated to cover the government's financial commitments beyond the2022 midterm elections was passed in a nearlyparty-line vote.[148]
In January 2023, after Republicans took control over the House, Yellen informed House SpeakerKevin McCarthy and new congressional leadership that the U.S. expected to hit the debt ceiling on January 19 and that the Treasury yet again would be forced to use "extraordinary measures" to prevent default, and it could last until June of that year. She repeated her call to "act in a timely manner to increase or suspend the debt limit."[149] Yellen rejected the GOP plan on government payments prioritization once "extraordinary measures" are exhausted, insisting that her department doesn't have the systems to do so and that proposal effectively means a default.[150]
On June 3, 2023, President Biden signed into law bipartisan congressional legislation that suspended the public debt limit throughout his first term in office, therefore ending theongoing debt-ceiling crisis. It came as a compromise on fiscal spending between the White House and House Republicans two days before the United States was estimated to reach the debt ceiling and subsequently could no longer meet its own financial obligations.[151]
In November 2021, Yellen and senior Treasury personnel were tasked with crafting a sanctions strategy that would maximize the costs inflicted onRussia's economy while limiting, if possible,the expected negative impact on the United States and its allies if apotential aggression began.[153] The Treasury Department worked closely across government agencies and with US allies abroad to imposeunprecedented international sanctions in response to theRussian invasion of Ukraine in February 2022.[153]
Yellen was a key proponent of aprice cap on Russian oil, a plan designed to deprive theKremlin of funding forRussia's war in Ukraine while reducing aninflation surge by preserving the global oil supply.[154] On December 2, 2022, following months of lobbying and negotiations by the United States, the emerging alliance of the G7 nations, the European Union, and Australia agreed to cap the price of Russian oil at $60 per barrel as an upper limit, with regular reviews to check that the ceiling stays at least 5 percent below average market prices.[155]
On April 7, 2022, atAmerican University's Kogod School of Business Center for Innovation, Yellen addressed for the first time the growing impact ofdigital assets on the American economy. Yellen outlined policy objectives and lessons that apply to the navigation of emerging technologies, which include "first, the U.S. financial system benefits from responsible innovation; second, it's often society's vulnerable who suffer most in an economic crisis when regulation is not moving at the same pace as innovation; third, regulation should focus on activities and risk, not technology; fourth,sovereign money is the core of a functioning financial system; and fifth, it'll take thoughtful public and private dialogue between various groups to move forward."[156]
Yellen with South African Finance MinisterEnoch Godongwana in November 2022
Yellen also announced possible plans for a government version of astablecoin; the administration is studying the possibility of issuing acentral bank digital currency (CBDC) or digital dollar while taking into consideration the impact of a CBDC on monetary policy, national security, and international trade, as well as its utility for consumers. Solving such problems is an "engineering challenge that would require years of development, not months," she said.[157]
In a speech delivered at theAtlantic Council on April 13, 2022, Yellen advised against thesupply chain risks posed by reliance on commodities from countries that aligned with authoritarian regimes like Russia or China and favoredfriendshoring strategy, an approach that limitssupply chain networks to allies and partner countries. She said that any moves from the other nations to undermine collective international effort to make Russia accountable for its aggression would draw the ire of the U.S. and its allies.[158] Yellen also called for the modernization ofinternational financial institutions so that they could meet the world's 21st-century challenges, invoking precedent of theBretton Woods Conference, which was held during theSecond World War to discusspost-war economic order.[159]
In December 2022, Yellen wrote an essay forProject Syndicate in which she singled out the key risks for the U.S. economy that may be mitigated with the implementation of friendshoring policies. Those risks include: "first, over-concentration of critical goods in any particular market may result in vulnerability in supply chains that hurt workers and customers; second, the need to protect from geopolitical and security risks emanating from hostile states; and third, the need to shift away from supply chains that relied on violations of corehuman rights, such as the use offorced labor in producing goods for import."[160]
On May 10, 2022, during a Senate Banking Committee hearing, Yellen made comments on the economic consequences ofRoe v. Wade overturning after a leaked draft majority opinion inDobbs v. Jackson Women's Health Organization showed theSupreme Court was poised to overrule its previous decisions that legalizedabortion in the United States. Sen.Bob Menendez (D-NJ) asked what reversing the landmark ruling would mean economically for the United States; Yellen responded, "I believe that eliminating the right of women to make decisions about when and whether to have children would have very damaging effects on the economy and would set women back decades." She added that keeping women from accessing abortions "increases their odds of living in poverty or need for public assistance." Sen.Tim Scott (R-SC) disagreed with her assertion and said, "I think finding a way to have a debate around abortion in a meeting for the economic stability of our country is harsh." She replied, "This is not harsh. This is the truth."[161]
Following that heated exchange, Senator Scott penned an op-ed forThe Washington Post in which he called Yellen's claim "simply false" and compared her arguments to those ofMargaret Sanger in support ofeugenics.[162] A number of prominentconservative media outlets and public figures alike similarly interpreted her comments on women'sreproductive rights, responding with sharp criticism.[163]
After the passage of theInflation Reduction Act in August 2022, Yellen directed theInternal Revenue Service (IRS) to use $80 billion in additional funding over a decade to clear backlogs, improve taxpayer services, update technology, and hire thousands of new employees.[164]
In June 2023, the Fiscal Responsibility Act, which was passed to reach a bipartisan agreement on debt ceiling, reallocated more than a quarter of the funding previously approved for IRS modernization to other budgetary areas. Despite that, Yellen assured that the agency still possesses the resources it needs in the near term to enhance service and ramp up enforcement. Furthermore, she said that the Treasury Department would continue to advocate for additional funds to make service improvements and help ensure that high-end taxpayers don't avoid paying their fair share.[165]
Yellen with Ukrainian PresidentVolodymyr Zelenskyy, February 27, 2023Yellen laying flowers in memory of fallen Ukrainian soldiers at theSaint Michael's Square, February 27, 2023
On February 27, 2023, Yellen made a surprise visit to Kyiv, in which she reaffirmed ongoing U.S. economic support for Ukraine in its struggle against Russia's invasion, including nearly $50 billion in security, financial, and humanitarian aid the federal government has provided over the past year as Ukraine's largest bilateral donor. She met with Ukrainian presidentVolodymyr Zelenskyy and the country's prime minister,Denys Shmyhal, to discuss the rollout of about $1.25 billion in budget relief, the first of a $10 billion package of civilian assistance for things like schools, hospitals, andemergency services, among others.[166]
Coinciding with her visit, Yellen wrote an op-ed forThe New York Times in which she highlighted the importance of America's support and repeated President Biden's message that Washington will stand with the Ukrainian people for as long as it takes. She said, "We cannot allow Ukraine to lose the war for economic reasons when it has shown an ability to succeed on the battlefield."[167]
On March 12, 2023, amidst thebanking crisis, Yellen made an appearance onCBS'Face the Nation and affirmed that financial regulators closely monitored the state of the banking system to make sure it remained safe and well-capitalized. Addressing thecollapse of Silicon Valley Bank, which marked thesecond-largest bank failure in American history at the time, she said she had been working with bank regulators to "design appropriate policies" to tackle the issue, though declining to provide further details. She stressed that the possibility of abailout was off the table.[168] Despite her statement, on the same day, Yellen approved actions enabling theFederal Deposit Insurance Corporation (FDIC) to complete its resolution ofSilicon Valley Bank in a manner that fully protects all depositors by announcing a systemic risk exception, with similar provisions being made forSignature Bank, another failed lender.[169] These extraordinary measures were taken to ensure confidence in the U.S. banking system and prevent spreading of abank run.[170]
On March 21, Yellen delivered a speech to anAmerican Bankers Association (ABA) summit in which she defended the forceful actions taken by regulators to avert a sweeping banking crisis and pledged resolute Biden administration support for lenders in need, regardless of their respective sizes. She said, "Our intervention was necessary to protect the broader U.S. banking system," and it was "not focused on aiding specific banks or classes of banks." Yellen went on to assure that "similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."[171]
Nevertheless, Yellen stated in her testimony before theSenate Appropriations Subcommittee on Financial Services and General Government the following day that the FDIC was not considering providing "blanket insurance or guarantees of deposits." She said uninsured bank deposits beyond the law-established $250,000 limit could be protected only if a failed bank was deemed to pose a systemic risk to the financial system, and that determination would occur only on a case-by-case basis by the regulators.[172]
On April 21, Yellen announced a proposal by the Financial Stability Oversight Council (FSOC) for a new procedure to designate nonbank financial companies as systemically important financial institutions, subjecting them to Federal Reserve supervision. It marked an effective reversal of previous guidance, which was issued in 2019 under theTrump administration and, according to Yellen, "created inappropriate hurdles as part of the designation process." She said such a designation process "could take six years to complete, which could prevent the council from acting to address an emerging risk to financial stability before it's too late." The revised guidance relied on a quantitative and qualitative analysis under which the council determined whether "material financial distress at the company or the company's activities could pose a threat to U.S. financial stability" and allowed for ample engagement between regulators and the company under review.[173]
On May 18, theBank Policy Institute (BPI) convened a meeting of more than two dozen bank CEOs to discuss the current state of the economy. Citing sources familiar with the matter,CNN Business reported on Yellen's remarks that more bank mergers may be necessary to overcome the sector's crisis.[174]
Yellen with US PresidentJoe Biden and Chinese PresidentXi Jinping at the Filoli Estate inWoodside, California, November 15, 2023Yellen meets Premier Li Qiang.
In a speech delivered atJohns Hopkins University'sSchool of Advanced International Studies on April 20, 2023, Yellen laid out three principal objectives of the Biden administration's economic approach toward China. Those principles are: first, the paramount importance of securing American national security interests as well as protecting human rights; second, seeking healthy and fair economic competition with China based on international rules; and third, aiming to engage on major global challenges like easing thedebt burden of the developing world andclimate change.[175] Though she emphasized that national security would always take priority if it collided with economics, her address ought to be interpreted as an olive branch to Beijing instead of the confrontation that has for a long time prevailed in relations between the two nations. Yellen's speech attempted to revive dialogue, at least on economic matters, as she made clear her desire to visit China as soon as possible to get the countries' previously pragmatic approach to each other back on track. However, its ultimate success is not at all obvious.[176]
Between July 6–9, Yellen visited China, the first trip to the country by a U.S. Treasury secretary in four years and her first since taking office. She began her visit by holding informal talks with the country's former vice premierLiu He, andPeople's Bank of China (PBC) governorYi Gang about the state of their domestic economies, as well as the global outlook, in a bid to reopen communication lines and find areas of common economic ground between the two nations.[177] Yellen then met with China's newly appointed economic team, including PremierLi Qiang, Vice PremierHe Lifeng, finance ministerLiu Kun, andChinese Communist Party (CCP) central bank chiefPan Gongsheng. During those bilateral meetings, she reaffirmed that the US national security restrictions on Chinese investment were intended to be narrowly focused and not have broad effects on thecountry's economy.[178] Yellen also expressed concerns about Chinese economic policies and went on to criticize the country's authorities for their treatment of foreign, particularly American, companies; she stated, "We seek healthy economic competition that is not winner-take-all but that, with a fair set of rules, can benefit both countries over time."[179]
Yellen with Chinese Finance MinisterLan Fo'an in Beijing, 7 April 2024
Overall, Yellen's visit was part of a broader push by the Biden administration to rebuild bridges between the two countries and open more lines of high-level communication with America's main geopolitical rival, in particular with China's new economic leaders. In a press conference capping her four-day trip to Beijing, Yellen described it as a mission to revive engagement between the two largest economies and said she believes it has brought US-China ties closer to a "surer footing."[180]
"We certainly have improved communication," Yellen said regarding China in an October interview with Sky News. The U.S. established a set of principles to governSino-American relations, Yellen said. These principles are: 1. The U.S. will always protect its national security and call out human rights abuses, 2. The U.S. is not seeking to decouple economically from China, and 3. The U.S. and China need to cooperate on a variety of global challenges, including climate change and debt relief.[181]
Comments on Israel
When asked about the potential economic implications ofIsrael's war on Gaza, Yellen told Sky News in an October 2023 interview, "I think it's too early to speculate on whether or not there will be significant consequences. I think, importantly, it depends on whether the hostilities extend beyond Israel and Gaza, and that's certainly an outcome we would like to avoid."[181]
Yellen maintained that the U.S. can manage funding wars in both Israel andUkraine, saying, "America can certainly afford to stand with Israel and to support Israel's military needs and we also can and must support Ukraine in its struggle against Russia."[181] She warnedIran that nothing is "off the table" for sanctions if Tehran is linked to the Hamas-led attack on Israel.[182]
Yellen is widely considered to be a "dove" onmonetary policy (i.e., more concerned with unemployment than with inflation) and, as such, generally favors lower rather than higher Federal Reserve interest rates.[183][184][185] She was overall in favor of more stringentfinancial regulation to lessensystemic risks brought on by flaws in the financial system.[186] Yellen was arguably the most liberal Federal Reserve leader sinceMarriner S. Eccles, who was appointed by PresidentFranklin D. Roosevelt amidst theGreat Depression in 1934.[7] Onfiscal policy, publications frequently refer to her as "sort of" adeficit hawk.[185][187] She expressed concern about theUnited States fiscal path prior to theCOVID-19 recession, particularly about thenational debt; in 2018, she said, "If I had a magic wand, I would raise taxes and cut retirement spending."[185] The following year, she again suggested that she favored both raising revenue and making changes to theMedicare,Medicaid, andSocial Security programs to control spending.[185] In September 2021, at aHouse Financial Services Committee hearing, Yellen lent support to efforts for the complete removal of the debt ceiling, arguing that the borrowing cap is "very destructive" and poses an unnecessary threat to the American economy.[188]
In January 2019, Yellen was among the 45 original signers of theEconomists' Statement on Carbon Dividends, which was eventually signed by over 3,500 prominent American economists promoting acarbon dividends framework for theU.S. policy on climate change.[189] In October 2020, theGroup of Thirty's Steering Committee Working Group on Climate Change and Finance, which Yellen co-chaired withMark Carney, prepared a report that developed a robust and inclusive strategy to amplify and mainstream the global transition to a net-zero emissions economy.[190] The study calls upon governments, businesses, and financial institutions to assessclimate risks and supports a phase-in ofcarbon pricing to accelerate a shift tocarbon neutrality.[191]
Yellen is aKeynesian economist and has been described as a "Keynesian to her fingertips".[192] In April 1999, Yellen discussed her views on the application of Keynesian economics to policymaking at the Yale economics department reunion. She stated that while most economists "appreciate the value of markets and incentives," Yalies "can recognize when they are not operating correctly and have higher concern for policies to remedy them."[193] During the2008 financial crisis, she "warned against an over-hasty removal of stimulus," and "believes the state has a duty to tackle poverty and inequality."[194] When her appointment as treasury secretary was announced, Yellen was viewed by Wall Street as a "Treasury secretary who will push hard for expansionary policies aimed at boosting growth, profits and share prices," although the ability of Yellen to push through her preferred fiscal policies was seen as likely to be constrained by congressionalgridlock.[194]
In March 2018,Charles D. Ellis endowedThe Janet L. Yellen Chair at theYale School of Management, which was named after her. ProfessorAndrew Metrick has been invested as the inauguralJanet L. Yellen Professor of Finance and Management at the School.[233]
In December 2018,Federal Reserve Board presented an annualJanet L. Yellen Award for Excellence in Community Development to recognize the exemplary work of Federal Reserve System staff, intended to honor former chair Yellen's commitment to public service.[234] Ariel Cisneros of theFederal Reserve Bank of Kansas City has been named the first recipient of the newly created award.[235]
Their son, Robert Akerlof (born 1981), is a fellow economist. He received a bachelor'ssumma cum laude in economics and mathematics from Yale University in 2003 and earned his Ph.D. in economics from Harvard University in 2009, where he was a Presidential Scholar. After two years as a postdoc atMIT, and 14 years at theUniversity of Warwick as an assistant and associate professor of economics, in 2024, he became a full professor of economics at theUNSW Business School in Sydney.[245]
Yellen and George Akerlof have often collaborated on research, including topics such as poverty, unemployment and a paper on the costs of out-of-wedlock childbearing. One of their most discussed papers at Berkeley, on why lower wages sometimes lead to lower employment, came from the personal experience of hiring a nanny for the first time.[244] Yellen says Akerlof has been her biggest intellectual influence.[244] Both frequently state that their lone disagreement is that she is a bit more supportive of free trade than he is.[21][22]
Yellen has an estimated net worth of $20million, accrued from stock holdings, speaking engagements, and various government and academic positions.[246] Upon taking office as U.S. Treasury Secretary, she divested her shares including those inPfizer,ConocoPhillips, andAT&T, among others.[247]
Yellen inherited from her mother a collection ofpostage stamps worth between $15,000 and $50,000.[248][117] She doesn't collect them on her own.[249]
Akerlof, George A.; Yellen, J. L. (January 1985). "A Near-Rational Model of the Business Cycle, with Wage and Price Inertia".The Quarterly Journal of Economics.100:823–838.doi:10.1093/qje/100.Supplement.823.ISSN0033-5533.
Akerlof, George A.; Yellen, Janet L. (May 1990). "The Fair Wage-Effort Hypothesis and Unemployment".The Quarterly Journal of Economics.105 (2):255–283.doi:10.2307/2937787.JSTOR2937787.
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^Clinton, Bill (April 22, 1994).Statement on Nominations for the Federal Reserve Board (Speech). Nominations for the Federal Reserve Board. Washington, D.C.: The American Presidency Project.Archived from the original on January 22, 2022. RetrievedJanuary 15, 2001.
^Jacobsen, Joyce; Hartmann, Heidi (September 18, 2013)."economists-letter-in-support-of-yellen". Letter to Barack Obama. Institute for Women's Policy Research. Archived fromthe original on October 2, 2013. RetrievedOctober 1, 2014.
^Lowrey, Annie; Appelbaum, Binyamin (September 15, 2013)."Summers Pulls Name From Consideration for Fed Chief".The New York Times.ISSN1553-8095.Archived from the original on March 8, 2021. RetrievedSeptember 16, 2013.Facing growing opposition in Congress, Lawrence H. Summers, the former Treasury secretary and a top contender for Federal Reserve chairman, told President Obama that he didn't want to be considered for the job.
^abBorak, Donna; Wiener-Bronner, Danielle; Wattles, Jackie (February 3, 2018)."The Fed drops the hammer on Wells Fargo".CNN Business.Archived from the original on June 12, 2021. RetrievedFebruary 4, 2018.
^Rappeport, Alan (April 5, 2021)."Yellen calls for a global minimum corporate tax rate".The New York Times.ISSN1553-8095.Archived from the original on April 19, 2021. RetrievedApril 6, 2021.Treasury Secretary Janet L. Yellen made the case on Monday for a global minimum tax, kicking off the Biden administration's effort to help raise revenue in the United States and prevent companies from shifting profits overseas to evade taxes. Ms. Yellen, in a speech to the Chicago Council on Global Affairs, called for global coordination on an international tax rate that would apply to multinational corporations regardless of where they locate their headquarters. Such a global tax could help prevent the type of "race to the bottom" that has been underway, Ms. Yellen said, referring to countries trying to outdo one another by lowering tax rates to attract business.
^Appelbaum, Binyamin (April 25, 2013)."Hawks and Doves at the Fed".economix.blogs.nytimes.com.Archived from the original on March 14, 2023. RetrievedApril 26, 2013.
^Yellen, Janet (April 16, 1999).Yale Economics in Washington (Speech). Yale Economics Reunion. New Haven, Connecticut: Yale Department of Economics.Archived from the original on November 24, 2014. RetrievedJanuary 15, 2001.
^Yellen, Janet (December 19, 2016).Commencement remarks by Chair Yellen (Speech). University of Baltimore 2016 Midyear Commencement. Baltimore, Maryland: Board of Governors of the Federal Reserve System.Archived from the original on December 19, 2016. RetrievedDecember 20, 2016.
^abcForoohar, Rana (January 9, 2014)."Janet Yellen: The Sixteen Trillion Dollar Woman".Time.ISSN0040-781X.Archived from the original on November 14, 2021. RetrievedJanuary 10, 2014."Firms are not always willing to cut wages, even if there are people lined up outside the gates to work. So why don't they?" asks Yellen. The couple's conclusion: some employers set pay higher to demonstrate that they value employees in a way that motivates them to do good work, even when markets are ready to undercut those wages. As any parent paying more than market rates for a nanny knows, child care is a labor market in which the conventional wisdom doesn't always hold.
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