White House Prepping for Yellen Departure After Midterm Election: Report
Throughout her tenure at Treasury, Yellen has been criticized for misjudging the threat to the U.S. economy posed by inflation.
White House officials are said to be gearing up for a potential shake-up of its economic team two years into President Biden’s tenure, with Secretary Yellen reportedly among those who may be on their way out after the November midterm election.
Along with the treasury secretary, officials are looking at the possibility of an early exit for the director of the president’s National Economic Council, Brian Dees. Also, the two-year term of the chairwoman of the White House’s Council of Economic Advisers, Cecilia Rouse, ends next spring, and Ms. Rouse is expected to return to her academic post at Princeton University.
Treasury officials have said Ms. Yellen has no plans to depart at the moment, and White House officials downplayed the reports Wednesday. Factoring into the decision on whether to replace the secretary is the prospect of getting any new appointments to the post confirmed should the GOP take control of the Senate in November.
News of the potential shake-ups was first reported by Axios.
The White House is said to be keen to reboot its economic messaging in light of continued public disapproval of its handling of the economy. Recent polling has suggested that the president has seen a boost in his approval rating on some issues, but more than half of Americans still give him a thumbs down on economic issues.
In recent weeks, Ms. Yellen has been jetting around the country attempting to put a more positive spin on the administration’s economic initiatives of the past two years. During stops in several states, including key election battlegrounds, Ms. Yellen has touted new laws aimed at tackling climate change, rebuilding the nation’s infrastructure, and reshoring such critical industries as computer chip manufacturing.
During stops in North Carolina Tuesday, Ms. Yellen played up the administration’s efforts to try to combat climate change by pumping hundreds of billions of dollars in tax credits into green energy programs. She said the president’s plans represent “the most aggressive action ever taken to address a climate crisis.”
Throughout her tenure at Treasury, Ms. Yellen has been criticized for misjudging the threat to the U.S. economy posed by inflation. For much of 2021, she downplayed the possibility of problematic price increases, insisting in October of that year that they would be “transitory,” a word that has haunted both her and the Federal Reserve officials who also used it ever since.
It wasn’t until March of this year that she admitted that inflation is “uncomfortably high” and that her earlier statements were wrong, a reversal that drew the ire of White House officials at the time. The former Fed chairwoman also has, much to the chagrin of administration officials, chafed at Mr. Biden’s attempts to blame inflation on “greedy” companies and at his plan to spend hundreds of billions of dollars to forgive student loan debt.
A note published by a Cowen analyst following the news said Ms. Yellen’s departure would not come as a surprise to Wall Street.
“Conventional wisdom in Washington since Yellen was confirmed is that she would only serve through the mid-terms. The Axios report seems to confirm this expectation,” the analyst said, according to Reuters. “The policy impact will depend upon her successor. We continue to view this as primarily a two-person race between Commerce Secretary Gina Raimondo and Federal Reserve Vice Chair Lael Brainard, though we expect others will make a push for the job.”