Janet Yellen, the 78-year-old Treasury Secretary, is set to conclude her tenure after leading the agency throughout President Biden's four-year term. As she prepares to step down, hedge-fund executive Scott Bessent is poised to take over the critical role of managing the nation’s financial security. Yellen's extensive experience in financial markets provides a strong foundation for her successor as they navigate ongoing economic challenges.
Throughout her time at the Treasury, Yellen faced numerous economic hurdles, including the effects of the Covid-19 pandemic. She remains a staunch advocate for the $1.9 trillion Covid relief bill and other spending measures, asserting their necessity in alleviating widespread suffering during a tumultuous period. Yellen emphasized that the stimulus spending "started pushing up prices a great deal," suggesting that while it may have contributed to inflation, it was an essential intervention at the time.
In a recent interview, Yellen defended the Biden administration’s fiscal policies against critics who point to ballooning U.S. deficits, which reached $1.8 trillion in the last fiscal year. "It was really important to spend the money to alleviate that suffering," she stated, adding that the administration prioritized deficit reduction even amid increased spending.
Yellen also addressed the broader context of rising prices, attributing much of it to "a supply-side phenomenon" stemming from the pandemic itself. She acknowledged concerns regarding defense spending, noting that "many feel that defense spending should go up," while also recognizing the political sensitivity surrounding mandatory spending programs such as Social Security, Medicaid, and Medicare.
Looking ahead, Yellen plans to return to the Brookings Institution after leaving her role at Treasury. She expressed a desire to engage in "some writing and reflecting on my experiences over the last four years." Before embarking on this new chapter, she mentioned that she would take a vacation.
As she prepares for her departure, Yellen's skepticism about President-elect Donald Trump's proposed Department of Government Efficiency signals her cautious approach to government reform. "It's hard to see how the math on that works," she remarked, indicating potential challenges in assessing such initiatives.
Leave a Reply