Yellen disappointed not to get second term as Fed chair
But she praises successor Powell and sees strong financial system
WASHINGTON – Janet Yellen said she was disappointed President Donald Trump didn’t offer her a second term as Federal Reserve chair but supports her central bank successor, Jerome Powell, who takes over Monday.
Powell, a Fed board member since 2012, is “thoughtful, balanced, dedicated to public service. I’ve found him to be a very thoughtful policymaker,” Yellen said in an interview with CBS’s “Sunday Morning.”
She also said the stock market – the Dow Jones industrial average closed at 25,520 on Friday after a nearly 666-point drop – was “high,” and the financial system was in stronger shape to handle a sharp sell-off than it was during the 2008 financial crisis. She cited changes put in place since that time; Trump has been critical of that effort.
“The financial system is much better capitalized. The banking system is more resilient,” Yellen said. “Our overall judgment is that, if there were to be a decline in asset valuations, it would not damage unduly the core of our financial system.”
Yellen, appointed by President Barack Obama, was the first woman to lead the Fed. Her four-year term ended Friday. She is joining the Brookings Institution think tank.
Yellen noted that it has been common for Fed chairs to receive a second term even when they were first nominated by a president of the other party.
“I made clear that I would be willing to serve another term, and so yes, I do feel a sense of disappointment,” she said.
Trump was highly critical of Yellen during the 2016 campaign but took to praising her after becoming president. Nonetheless, he decided against reappointing the Democrat in favor of nominating Republican Powell.
Before becoming Fed chair in 2014, Yellen had served as the central bank’s vice chair and was president of the Fed’s San Francisco regional bank.
“I’ve been in high level positions in the Federal Reserve for many years, where I think I’ve had a seat at the table to make the arguments that I thought needed to be made and to advocate for good policy,” she said.
Yellen was asked whether she believed the economy was under threat because stocks had risen too high, creating an asset bubble that could burst, with disastrous results.
“I don’t want to say too high. But I do want to say high,” Yellen said, adding that it was “a source of some concern that asset valuations are so high.”