March 14, 2014
The new head of the U.S. Federal Reserve, Janet Yellen, is busy trying to bolster the economy, cut unemployment and watch out for inflation. On Wednesday she will face reporters for the first time as Fed chief, a job that makes her one of the world's most powerful bankers and most important women. She says better communication about economic issues and policies will help the economy.
When Janet Yellen talks, powerful people listen.
The Federal Reserve chair has been briefing congressional committees about efforts to speed up the economic recovery and improve the job market without sparking inflation.
She said a Fed program using bond purchases to push down long-term interest rates was not being cut back too slowly - or too quickly.
It’s an example of the economics professor putting her teaching and communications skills to work.
“I strongly believe that monetary policy is most effective when the public understands what the Fed is trying to do and how it plans to do it,” she said.
President Obama picked Yellen to be the first woman to head the Fed, in part because she could relate to ordinary people.
“Too many American still can’t find a job and worry how they will pay their bills and provide for their families," she said.
Obama said Yellen was also tough, effective, and skillful.
“She sounded the alarm early about the housing bubble, about excesses in the financial sector and about the risks of a major recession,” he said.
Besides her experience in dealing with Congress, Yellen has also been second-in-command at the Fed, head of the Federal Reserve Bank in San Francisco, and a presidential economic advisor.
She is an economics professor, a researcher, and teacher at the University of California at Berkeley and other top schools.
An academic colleague, who has known Yellen for decades, says she will do well leading the Fed because she listens to the opinions of others, is good at putting people at ease, and even learned from her students who come to Berkeley from all over the world.
In a Skype interview, Berkeley professor Jim Wilcox said Yellen could also use humor to defuse a tense meeting, but was probably not the one in the middle of the room telling a joke.
"She does have a good sense of humor. She is more likely to be on the demand side than the supply side [more likely to laugh at a joke then to tell one] when it comes to jokes, she appreciates a good joke," he said.
Economics is a family affair for Yellen, who is married to a Nobel-prize winning economist and their son is an economics professor.
“I would also like to thank my spouse George, and my son Robert. I couldn’t imagine taking on this new challenge without their love and support," she said.
Between the fragile U.S. economy and Washington's tangled politics, Yellen will need all the family support and personal skill she can muster.