President Donald Trump in 2017 chose to replace Yellen with current Fed Chairman Jerome Powell at the expiration of her first term at the central bank. Gary Cohn, Trump’s former National Economic Council director, offered congratulations to Yellen shortly after the news broke.
“Janet Yellen is an excellent choice for Treasury Secretary. Having had the opportunity to work with then-Chair Yellen, I have no doubt she will be the steady hand we need to promote an economy that works for everyone, especially during these difficult times,” he wrote on Twitter.
Biden’s team had also been eyeing Fed Governor Lael Brainard and former Fed Vice Chair Roger Ferguson for the job, according to people familiar with the transition team’s thinking.
Still, progressive Democrats may also welcome Yellen as Biden’s Treasury pick thanks in part to her commitment on how economic policymakers could address climate change. She has in recent years voiced support for a carbon dioxide emissions tax.
Yellen is currently an economist at the Brookings Institute. Before becoming Fed chair, Yellen was at the helm of the San Francisco Federal Reserve Bank and was the 18th chair of the Council of Economic Advisers under the Clinton administration.
The Biden transition team did not respond to CNBC’s request for comment. Brookings declined to comment.
Jen Psaki, who oversees Biden’s nominations team, said on Twitter later Monday that Biden “looks forward to announcing some members of his economic team early next week.”
The Wall Street Journal first reported the choice Monday, citing people familiar with the matter.
If confirmed, Yellen will without a doubt inherit one of the most demanding positions in the incoming administration and face a litany of unprecedented economic hurdles.
The Treasury secretary is the foremost navigator of the U.S. economy, managing the public debt and the execution of foreign penalties, monitoring the collection of taxes, and serving as the chief liaison between the administration and the financial markets and businesses large and small.
“I think Janet Yellen is a solid person who I think doesn’t have a harsh partisan tone to her, which is what I think Biden is looking for,” said Fundstrat Global Advisors strategist Tom Block.
“I think Mnuchin did a pretty good job in a very difficult situation, keeping relationships open with Pelosi,” he added. “I think Janet Yellen can do the same thing with the Republicans in the Senate.”