The solid economy can give thanks to Janet Yellen

Posted February 05, 2018

Under Yellen's leadership, the Fed in late 2014 halted quantitative easing, an extraordinary monetary policy that injected cash into bond markets in the hopes of stimulating private-sector investment.

When Janet Yellen leaves the U.S. Federal Reserve this weekend after four years as chair, her legacy will include having shattered a social barrier: She is the first woman to have led the world's most powerful central bank, a position that carries enormous sway over the global economy.

Wells Fargo says Federal Reserve sanctions on the bank after a fake accounts scandal and other problems could reduce the embattled bank's profits by as much as $400 million this year.

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Yellen, 71, spent almost 17 years in the system: four as chair, four as vice chair, three as a Fed governor and six as San Francisco Fed president.

It had been the tradition over the past four decades for the president to renominate the Fed leader for a second term. Earlier on Friday, the Brookings Institution announced Yellen, 71, is joining the Washington-based think tank to continue her economic studies and particularly her analysis of the labour market.

"Chair Yellen has performed a great service to her country - the economy and the American people were in good hands with her at the helm of our central bank", said Brookings President John Allen in the statement. Three current board members will be replaced by April, and a fourth will depart by the end of the year. "Yes, it can keep going", she said.

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Inflation, though, has consistently fallen short of the Fed's 2 per cent objective during Yellen's tenure and stood at 1.7 per cent in December, according to the Fed's favourite price gauge.

Before becoming Fed chair in 2014, Yellen was the central bank's vice-chair and president of the Fed's San Francisco regional bank. Yellen said. "And I think 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". She first served as a governor under Chairman Alan Greenspan in 1994 to 1997, before chairing the White House Council of Economic Advisers from 1997 to 1999 during the Clinton administration. "Unemployment was 6.7 percent when she was sworn in; today, its 4.1 inflation remains shy of the Fed's 2 percent target, but it is getting closer".

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