Joe Biden, the US president-elect, is poised to choose Janet Yellen as his Treasury secretary and top cabinet official in charge of the American economy, as it faces a painstaking recovery from the shock of the coronavirus pandemic.
The likely choice of Ms Yellen, 74, will cement her status as one of the top US policymakers of her generation, given her previous role as chair of the Federal Reserve, president of the San Francisco Fed, and chair of the White House council of economic advisers under Bill Clinton.
Ms Yellen recently nudged ahead of Lael Brainard, a Fed governor, as Mr Biden’s leading choice to lead the Treasury department with an announcement expected in the coming days, according to people familiar with the matter.
She declined to comment through a spokesperson for the Brookings Institution.
Other contenders for the job included Sarah Bloom Raskin, the former deputy Treasury secretary; Roger Ferguson, the chief executive of the Teachers Insurance and Annuity Association; and Raphael Bostic, the president of the Atlanta Fed. The Biden transition team declined to comment.
Assuming she is confirmed by the Senate, Ms Yellen will be the first woman to serve as Treasury secretary in the institution’s 231-year-old history. She will take over from Steven Mnuchin, Donald Trump’s Treasury secretary, with the difficult mission of jolting the US recovery with billions of dollars of new stimulus called for by Mr Biden, while keeping financial markets stable.
Those efforts are likely to involve painstaking negotiations with Capitol Hill, given Republican resistance to large-scale spending increases, and a close relationship with Jay Powell, the Fed chairman, particularly since Mr Mnuchin recently moved to wind down several emergency lending facilities at the central bank that have been crucial to its crisis response.
Mr Biden’s move to choose Ms Yellen for the Treasury role will bring a steady hand and a well-known figure to the tiller of the American economy, but her nomination also reflects his desire to finely balance demands from the moderate and progressive wings of the Democratic party.
As the manoeuvring for the top Treasury position intensified in recent weeks, Ms Yellen was considered to be sufficiently to the left of Ms Brainard and Mr Ferguson to satisfy the liberals, but not quite as progressive as Ms Raskin.
Ms Yellen is a native of New York City who received her undergraduate degree in economics at Brown University then secured a doctoral degree at Yale University where she was taught by Nobel laureate Joseph Stiglitz.
As well as her time at the White House, she served in several different senior roles at the Fed before being nominated to chair the US central bank by then president Barack Obama in late 2013, taking up the post in early 2014.
Ms Yellen led the Fed through a tightening cycle as the central bank tried to normalise its monetary policy in the latter stages of the recovery from the financial crisis.
She was considered to be among the more dovish monetary policymakers, but the interest rate rises under her watch were later judged to be excessively hawkish by the US central bank, which found that unemployment could fall to far lower levels before triggering inflation.
After a historic 2020 election, stay on top of the biggest themes driving US politics, business and markets from Washington, New York and beyond with Rana Foroohar and Edward Luce. Sign up here