Janet Yellen will be returning to Washington to be Treasury secretary in the Biden administration, according to sources familiar with the matter. Her expected nomination Tuesday would make her the first woman to hold the post.
The former Federal Reserve chairwoman would also be the first person to have held all three top economic policy positions in Washington, having chaired the Council of Economic Advisers under President Bill Clinton.
Her tenure at the Federal Reserve under President Barack Obama involved dealing with an unfolding financial crisis that saw the Federal Reserve take extraordinary steps, including multiple rounds of quantitative easing. Economist Paul Krugman in a tweet said Ms. Yellen is "one of the people who kept realistic, useful macroeconomics alive through some intellectual dark times."
At the end of her term in February 2018, House Financial Services Committee Chairwoman Maxine Waters, D-Calif., then a ranking member, said Ms. Yellen "consistently demonstrated an unflappable ability to lead with a steady hand during one of the most challenging periods in recent history. Her bold use of measures such as quantitative easing helped stabilize the economy and supported a significant increase in employment and economic growth."
Sen. Elizabeth Warren, D-Mass., praised Ms. Yellen's nomination, calling her one of the most successful Fed chairs ever who stood up to Wall Street. "She is smart, tough, and principled," said Ms. Warren, who also criticized current Treasury Secretary Steven Mnuchin for catering "to the wealthy and well-connected, while struggling families and small businesses were left behind."
Ms. Yellen's nomination also "bodes well for the climate resilience of the U.S. economy," said Mindy Lubber, CEO and president of Ceres. Ms. Yellen has long supported putting a price on carbon pollution, and "would be well positioned to address climate change as a systemic risk to the U.S. economy," Ms. Lubber said. "Given the recent affirmation from the Federal Reserve that climate change is a threat financial regulators have an obligation to address, Yellen would enter her new position with a clear mandate."
Ms. Yellen recently co-published with Bank of England Chairman Mark Carney "Mainstreaming the Transition to a Net-Zero Economy," a report highlighting the role of financial regulators in addressing climate risk.
Current Treasury Secretary Steven Mnuchin plans to move $455 billion in unspent Cares Act funding into an account that Ms. Yellen will not be able to use without congressional authorization. That includes $429 billion Mr. Mnuchin is clawing back from the Federal Reserve’s emergency lending facilities fund and $26 billion designated for direct loans to companies. Without congressional authority, Ms. Yellen could only access $80 billion in an Exchange Stabilization Fund.
Bloomberg contributed to this article.