On Monday, February 3, Janet Yellen was sworn in as Chair of the Federal Reserve of the United States, the first woman to hold the esteemed position in the central bank’s history. Yellen faces immense challenges, which she acknowledged earlier this month, noting that while unemployment has decreased, our nation’s economic recovery is “far from complete.” The Fed—which has a triple mandate to maximize employment, stabilize inflation, and regulate the banking sector—defines the country’s monetary policy, and therefore largely determines the direction of our nation’s economy.
In Yellen’s first hearing to U.S lawmakers since being sworn in, she declared her intention to continue her predecessor’s strategy of slowly easing off the monetary policies that were instated at the beginning of the Great Recession. Under Ben Bernanke, the former chairman, the Fed purchased billions of dollars worth of mortgage-backed securities in order to drive interest rates down to close to zero and spur economic growth, a policy known as quantitative easing. However, economists still disagree about whether quantitative easing substantially and structurally helped to assuage our economic woes.
Perhaps most important is Yellen’s vow to shift the Fed’s priorities from Wall Street to Main Street. Yellen’s emphasis on “improving the lives of households in the United States” is of great importance considering how the slow economic recovery is affecting the populace unequally. In addition, Yellen’s concern for Main Street is hopeful after years of Wall Street’s corruption and fraud. Whether or not new leadership can reinvigorate the country’s economic outlook, Yellen’s moral proclamations have set an important tone, one that we must hope will guide any future economic discussions, dealings, and policies.