Nov.23
Getting America back to work
As Fed chief, Yellen ignored inflation hawks who (incorrectly, in hindsight) pushed her to rapidly raise interest rates. Instead, she patiently waited [until a Republican President was in power] to hike rates to allow more time for the economy to heal from the Great Recession and boost employment.
With interest rates at zero, the Fed has limited power today to further bolster the economy and address inequality. But at Treasury, Yellen could quarterback fiscal policy at a time when it's the only game in town.
"A Yellen-led Treasury would use the fiscal firepower of the United States to return to full employment," said Joe Brusuelas, chief economist at RSM US. "Yellen would be a great pick because she speaks to the whole economy."
Given expectations the US Senate will be run by Republicans, that firepower could be directed towards an infrastructure package designed to create millions of jobs.
"Leaning toward full employment as opposed to unnecessary worries about inflation would create the conditions for what will be called the Biden boom," Brusuelas said.