Who is Janet Yellen, the woman everyone seems to be talking about these days? Why have we been hearing this name so often and what implications will it have on us?
Well, we will presumably be hearing of Janet Yellen for quite a long time: last Wednesday President Obama nominated Mrs. Yellen as the next chairman of the Federal Reserve. But this comes at a time when the figure of Fed Chairman is evolving, shifting from that of a detached, grey-haired economist to that of a political, good hearted leader. And Mrs. Yellen surely identifies with this last profile, but let us make some history of the events:
born and raised in Brooklyn, she soon starts her University carrier at Brown then at Yale for her PhD. One could say she has always been in the Fed Business: since the 1970s, she has been member of the Fed Board of Governors several times, as well as being Chief Executive Officer of the Federal Reserve Bank of San Francisco up until 2010. She also taught at Berkeley, Harvard and London School of Economics. She certainly is a great connoisseur of the business, this goes without saying. And over the years she has proven to be less interested in numbers and statistics than she is in actual effects on the real economy. By many on Wall Street she is considered a dove: that is to say, she will be more concerned with reaching lower levels of unemployment at the cost of having higher levels of inflation. So markets can probably feel safe for now, it looks like the exit from Q.E. will come at a very slow pace. On one hand, she is a symbol of safety. On the other hand, she is the one appointed to drain the liquidity from the market, and now or later this moment will come. Only time will tell: So in the meanwhile, we wish Mrs. Yellen good luck, she’ll certainly need it. And hope that when the time will come, there won’t be too much of a plunge. As a professor of economics at Harvard once said, “If you have heart palpitations merely from walking up some steps, you’re really going to struggle when you have to start jogging”.