Swearing-in of new chair will mark Yellen’s exit
Federal Reserve Chair Janet Yellen said she will step down from its Board of Governors once her successor is sworn into the office, widening the scope for President Donald Trump to shape the U.S. central bank’s leadership for years to come.
Trump has nominated Jerome Powell to replace Yellen, 71, when her term ends in February, though his chairmanship is still subject to Senate confirmation. That move bucked a long-standing tradition of presidents reappointing their predecessor’s Fed pick.
“As I prepare to leave the Board, I am gratified that the financial system is much stronger than a decade ago, better able to withstand future bouts of instability and continue supporting the economic aspirations of American families and businesses,” Yellen, the first woman to lead the U.S. central bank, wrote Monday in her letter of resignation to Trump.
Her decision to leave will give Trump an additional fourth spot to fill on the Fed’s seven-person Board of Governors in Washington, including for a vice chairman. The White House has said that Trump was focused on making a selection for that position this year.
Yellen has presided over almost four straight years of steady economic growth, sluggish inflation and a jobless rate that has fallen even as she directed the gradual exit from crisis-era policies. On her watch, the Fed halted a controversial bondbuying campaign, lifted interest rates off zero, and began to unwind its US$4.5 trillion balance sheet.
“Sustaining this progress will require continued monitoring of, and decisive responses to, newly emerging threats to financial and economic stability,” she wrote.
Yellen could have stayed on as a governor even after stepping down as the institution’s leader, because her term as governor does not end until Jan. 31, 2024, though such a decision would have been unexpected.
“I am confident that my successor as chair, Jerome Powell, is deeply committed to that mission and I will do my utmost to ensure a smooth transition.”
Yellen served as vicechair of the board of governors from 2010 to 2014 before becoming chair. She’s previously been the head of the San Francisco Fed and chair of Bill Clinton’s Council of Economic Advisers, and she’s a professor emerita at the University of California at Berkeley.