- Janet Yellen will support another term for Jerome Powell as Fed chair, Bloomberg reported Saturday.
- Powell succeeded Yellen as the head of the US central bank.
- Biden is expected make a decision in the coming days.
- See more stories on Insider’s business page.
Treasury Secretary and former Chair of the Federal Reserve Janet Yellen will support another term for her successor Jerome Powell as head of the US central bank, according to a report from Bloomberg on Saturday.
Yellen made such comments to senior White House advisors, Bloomberg reported, citing people familiar with the matter.
Powell’s four-year term as Fed chair will end in early 2022. President Joe Biden, who has the responsibility of appointing the chair of the Fed, will reportedly make a decision on the matter in coming days.
Yellen, who was appointed chair of the Fed under President Barack Obama and then-Vice President Joe Biden, was appointed by Biden to the Treasury Secretary position. She thus presumably holds some degree of influence over the decision Biden will make.
The chair of the Fed is arguably the top economic policymaking position in the world as that person oversees the world’s largest and most influential economy. The chair, alongside other members of the central bank’s Federal Open Market Committee, plays a major role in setting interest rates and conducting asset purchases that provide liquidity to markets.
Powell, who was appointed by President Donald Trump in early 2018, has overseen the central bank and its policy during the economic mayhem caused by the coronavirus pandemic. As the world shut down and economic activity came to halt, sending unemployment rates to frightening levels, Powell and the FOMC cut interest rates to near-zero and started a mammoth quantitative easing program in which the country essentially buys its own debt. This has helped the economy and financial markets bounce back.
Now, the central bank is in the midst of deciding when, to what degree, and at what pace they will tighten monetary policy.
Some within the Fed, as well as some outside observers, believe the bank should start tapering asset purchases soon. Others take a more dovish stance, not wanting to risk an self-inflicted economic downturn. The next chair of the Fed, Powell or not, will have the difficult task of navigating the delicate economic environment.