Janet Yellen made history as the first woman to lead the world's most influential central bank, serving as chair of the Federal Reserve from early 2014 until she stepped down last month.
Staff at the Atlanta Fed shared reflections on her tenure and legacy, describing her as a soft-spoken but brilliant economist.
"She was tough," Atlanta Fed president Raphael Bostic said.
Former Fed chair Janet Yellen with three of her predecessors (from left): Alan Greenspan, Ben Bernanke, and Paul Volcker
Yellen "didn't deal with weak thinking. She was willing to be challenged, and she would challenge people all the time," Bostic added. "But she was nice. She was respectful, and she was collegial." He said he'll always remember the extraordinarily sustained standing ovation Yellen received at her last Federal Open Market Committee (FOMC) meeting in late January.
Former Atlanta Fed president Dennis Lockhart, who had regular breakfast meetings with Yellen before meetings of the Federal Open Market Committee (FOMC), predicted that history will judge her well.
Lockhart, who served as Atlanta Fed president from 2007 to 2017, said Yellen routinely called FOMC members a week before scheduled meetings to hear their opinions about economic circumstances, a gesture he always appreciated. He added that during FOMC meetings, Yellen would allow other Committee members to lay out their perspectives before she shared her policy views.
"She always struck me as deliberate in her thinking and in her approach to things," Lockhart said. "She worked well with everyone."
A steady hand on the policymaking lever
Lockhart said Yellen deserved credit for skillfully guiding two major policy transitions. Most recently, she began unwinding the quantitative-easing stimulus, which was marked by large Fed bond purchases in response to the financial crisis. The Fed bought more than $4 trillion of government bonds and mortgage-backed securities from 2009 to 2014 and began trimming its bond holdings last October, partly by curbing its reinvestment of proceeds. To limit market disruption, Yellen telegraphed the Fed's plans, saying in 2017 that the process could extend through 2022 before the balance sheet falls to precrisis levels.
Lockhart also recalled Yellen's skillful management of "liftoff" in December 2015, when the Federal Reserve raised the federal funds rate target for the first time in nearly a decade. She communicated carefully to the financial community and built consensus among FOMC members to make sure that liftoff was a success and didn't cause unnecessary problems, he said.
"There was a lot required in the three or four months preceding that December meeting to ensure we took no one by surprise," Lockhart said.
Numerous metrics depict the economic improvement that occurred under Yellen's tenure. For example, when she took office as Fed chair, unemployment was around 6.7 percent. Last month, it stood at 4.1 percent.
"Quite literally, millions of people were put back to work during Yellen's tenure," Lockhart said.
A Brown University graduate who earned a PhD in economics from Yale University, Yellen worked in academia, served on the Fed's Board of Governors, and chaired the White House Council of Economic Advisers before being named the first female president of the Federal Reserve Bank of San Francisco in 2004. She became the Fed's vice chair in 2010. Now, she is a distinguished fellow in residence with the economic studies program at the Brookings Institution.
Breaking through in a male-dominated field
Yellen's ascent to Fed chair—she was nominated for the post by President Barack Obama—marked a supreme achievement in an overwhelmingly male industry.
"She's a trailblazer for women," said Amy Hennessy, the Atlanta Fed's director of economic education who moderated a town hall meeting with Yellen and teachers nationwide in 2017. Even so, Hennessy noted that Yellen advised Fed employees to refer to her as "chair" instead of "chairwoman," indicating that the job had nothing to do with gender.
"She wanted the position to be recognized as gender neutral," Hennessy said.
Marie Gooding, the Atlanta Fed's first vice president and chief operating officer, remembers when Yellen interviewed her for her current job. The interview took place after an FOMC meeting, and Gooding was impressed that Yellen was able to switch seamlessly from the policymaking discussions to an interview posture.
"Her questions were very thoughtful, and you could tell she was extemporaneously firing them off," Gooding said.
Though the women of Yellen's generation fought hard for gains, Gooding said that Yellen represents much more than the first female Fed chair. "She's just a brilliant economist," Gooding said.
Paula Tkac, senior vice president and associate director of research, noted that despite the relative brevity of Yellen's time leading the Fed, she has a distinguished track record in U.S. economic policymaking. "Her service to the country is a career-long set of contributions," Tkac said. "I think her public service will continue as that objective voice to talk about economic issues and prompt people to think about them seriously and perhaps differently."
Yellen will likely be remembered for bringing attention to those who did not share in the economic recovery, said David Altig, the Atlanta Fed's director of research. A noted labor economist, Yellen has written and spoken extensively about income inequality and barriers to economic mobility in low- and moderate-income communities. Last year, she told a National Community Reinvestment Coalition conference that stubbornly higher unemployment in lower-income and minority neighborhoods underscores the need for workforce development programs that provide job training and other assistance.
"Her tenure will be recognized as a period when the Fed began to take seriously questions about the broader distributional impact of what we do—as the time when community development efforts of the central bank became more clearly focused on people who might have been left behind by the broader swath of progress," Altig said.
Karen Jacobs
Staff writer for Economy Matters