US Federal Reserve Chair Janet Yellen on Monday submitted her resignation from the Fed board to US President Donald Trump, announcing that she is to leave when her successor is sworn in.
In a letter to Trump, Yellen said she would “do my utmost” to make sure that there is a smooth transition to Jerome Powell, who was on Nov. 2 tapped to become the next Fed leader after the president decided not to offer Yellen a second term.
Yellen’s decision gives Trump the chance to fill five positions on the Fed’s seven-member board in his first year in office, in addition to picking Powell to be the next chairperson.
Photo: Reuters
Board member Lael Brainard is to be the only Fed board member not nominated by Trump, meaning his selections will have tremendous influence in setting the nation’s future monetary policy.
Powell’s confirmation hearing is scheduled for next week before the Senate Banking Committee.
Powell, at one time the only Republican on the board, is not expected to encounter major hurdles in winning confirmation. He has been on the Fed board since 2012.
Yellen’s four-year term as chair ends on Feb. 3 next year, but she could have chosen to remain on the board until her term as a board member ended in January 2024.
The board has three vacancies, including the No. 2 spot of vice chairman.
The president earlier this year tapped Utah financier Randal Quarles to be vice chairman for supervision.
The administration has not announced selections for the other openings, but last week, the Wall Street Journal reported that former Pacific Investment Management Co CEO Mohamed El-Erian was one of several candidates being considered for the vice chairman job.
It was also reported that Kansas State Banking Commissioner Michelle Bowman was being considered for the Fed board seat reserved for someone with community banking experience.
Until Monday, Yellen had been mum on whether she might stay on the Fed board if she did not get another term as chair.
In her letter, she said it had been “my great privilege and honor” to serve in the Fed system over three decades, first as a member of the board during the 1990s. She served as president of the Fed’s San Francisco regional bank, then Fed board vice chairman. In 2014, Yellen succeeded Ben Bernanke to become the first woman to head the US central bank.
“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,” she said in the letter. “I am also gratified by the substantial improvements in the economy since the crisis.”
Shawn Sebastian, codirector of the Fed Up coalition, a collection of progressive groups, called Yellen’s departure “a loss for working people across the country.”
Sebastian praised Yellen for the stands she took on “economic inequality, racial disparities in the economy, the role of women in the workplace and the need for more diversity at the Fed.”
Yellen was the first Fed leader not to be offered a second term in four decades.
In comments a week before announcing his decision, Trump had suggested that while he held Yellen in high regard, he might want to make his own mark on the central bank by selecting someone else for the top job.
Powell, a lawyer by training, is to be the first official without an advanced degree in economics to head the central bank in four decades.
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