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Thursday, November 14, 2013

Yellen Will Walk ‘A Tight Rope’ At Fed, Says Former Colleague

Janet Yellen, vice chairwoman of the Federal Reserve Bank, is pictured in April 2011. (Mark Lennihan/AP)

Janet Yellen, vice chairwoman of the Federal Reserve Bank, is pictured in April 2011. (Mark Lennihan/AP)

Janet Yellen, President Obama’s nominee to succeed Ben Bernanke as Chair of the Federal Reserve Bank faces a confirmation hearing today in the Senate.

She is expected to be confirmed, though a Washington, D.C.-based conservative group, American Principles in Action, has started a campaign against her nomination, saying the policies she’s advocating will cause inflation.

Here & Now’s Meghna Chakrabarti gets the latest from NPR’s Jim Zarroli, and speaks with Cathy Minehan, a former colleague and friend of Yellen’s.

Minehan tells Here & Now that she’s not yet worried about inflation, but she is worried about the the tight rope Yellen will face: The still slow recovery needs the help of the Fed’s stimulus programs, but continuing those programs for too long could lead to inflation.

To hear the interview with NPR’s Jim Zarroli, click the audio at the top of the page.

Interview Highlights: Cathy Minehan

On not being too worried yet about inflation

“The fact is we need the underlying pace of growth in the economy to kick in, in a very stable way to start creating the demand that is an important part of the inflation equation — before you start getting worried about inflation. And the high wire act is to really figure out when the time is right. I don’t think that there is a greater chance of Janet Yellen being an inflationary chairman than there is Janet Yellen taking away things a little bit early. It’s a high wire act. There are risks on both sides.”

On what Yellen’s mark would be in terms of style and how she presents the Fed

“You know, I wouldn’t have picked Ben Bernanke to go on ’60 Minutes.’ I think Janet’s going to shape a style that may be something that people — knowing her — haven’t really anticipated, because she’ll see there’s a need for the country — as I think was behind Bernanke’s appearing on ’60 Minutes.’ Will she be perfect at it from the beginning? No. Ben wasn’t either. Communication is very hard. I think it’s something that brings with it a level of difficulty that not a lot of people are trained for.”

On what it means to her that Yellen would be the first woman to lead the Fed

“What matters to me is the next chair of the Fed knows his or her economics inside out, upside down, knows how it hits people on the street; is committed and has the brains and the stomach to stand up to criticism — committed to the goals of the Federal Reserve — to low inflation, to financial stability and to supporting growth. And it matters to me that the next chairman of the Fed communicates well, the balance of the things the Fed has to deal with. I think Janet can do all that. I’m thrilled that it’s a woman, but I’m more thrilled that she’s each of those three things.”

Guests

  • Cathy Minehan, dean of the School of Management at Simmons College and former president of the Federal Reserve Bank of Boston.
  • Jim Zarroli, NPR business reporter.

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Robin and Jeremy

Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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