‘Wall Street is thrilled’: Analysts react to Yellen as Biden’s pick for Treasury secretary

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Economists and other analysts have spoken out over the news that President-elect Joe Biden has chosen former Federal Reserve Chairman Janet Yellen to head the Treasury Department.

Biden’s transition team officially announced Yellen as the Treasury’s pick on Monday, along with other selections for its economics team, after multiple media outlets reported on November 23 that Biden was planning to name them. If confirmed by the US Senate, she would become the first woman to serve as Secretary of the Treasury.

Other choices include Neera Tanden, head of the Left Center for American Progress, for the post of director of the Office of Management and Budget; Cecilia Rouse, labor economist at Princeton University, for the chair of the Council of Economic Advisers; Wally Adeyemo, who served in the Obama administration, as Assistant Secretary of the Treasury; and Jared Bernstein and Heather Boushey as members of the CEA. Reports also say Brian Deese was chosen as a top economic adviser, but the move was not announced on Monday.
The economics team should prioritize the COVID-19 pandemic. Boushey offered the following assessment in a tweet last week: “As long as COVID is not controlled, we cannot go back to business as usual – against each other is a false compromise. ”

Here are some reactions, which came as the main US SPX stock gauges,
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DJIA,
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COMP,
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rose last week, moving to session highs as the Yellen headlines hit on November 23. Stocks lost ground on Monday, but are still on track for big gains in November.

• “There is… in the analysis a widely held belief that Yellen is not partisan. … But Yellen encountered her own political controversy early in her tenure as Fed Chairman when it was revealed she had met and taken phone calls from Democrats on the Banking and Financial Services committees of the Senate Chamber on dozens of occasions while limiting interactions with member Republicans to less than a handful of calls. … That said, Wall Street is delighted with the meeting with Yellen. “If Joe Biden is going to be president, Yellen is just about the best date we could ask for,” said a friend who heads compliance at one of America’s five biggest banks. – Chris Low, Chief Economist at FHN Financial

• “The appointments are mostly consistent with previous announcements from Mr Biden’s staff – people who are left of center but not aligned with the progressives. Tanden might be the most aberrant because she ran a liberal think tank in Washington and has good relations with progressives. On the other hand, she generally has a bad relationship with Republicans, which could be a problem for her confirmation. – Brian Gardner, Chief Washington Policy Strategist at Stifel

• “We expect her to easily win Senate confirmation. For us, Yellen is likely to support the restart of 13 (3) loan programs like Main Street and the installation of Muni. It could also support housing assistance. We see his economic experience giving him more credibility to negotiate a stimulus package. – Jaret Seiberg, Analyst at Cowen Washington Research Group

• « [Yellen] fits well with the orthodoxy of the business community, and I suspect that this fact, combined with its familiarity, will lead to a largely positive response from financial markets. More broadly, from what we’ve seen so far, Biden seems to be choosing mostly former Democratic hands to fill his most vital Cabinet and White House positions, people from the Obama years (and in some cases , even Clinton). Progressives had hoped to exert a major influence in the next administration, but if Biden’s staffing choices so far are any indication, he intends to rule more from what constitutes the middle of the Democratic Party today. only to push the envelope far to the left. – Stephen Stanley, chief economist at Amherst Pierpont

According to MarketWatch archives (December 2018):Yellen worries about the next financial crisis

And see:Biden chooses Blinken as secretary of state, Kerry as climate envoy

• “There are a lot of reasons to be excited, but here’s a big one: As former Fed chair, she enjoys great relationships across the world. It can begin to repair the damage to economic diplomacy over the past four years. – Michael R. Strain, Director of Economic Policy Studies at the American Enterprise Institute, in a tweet

• “SP. Yellen’s vast experience as a labor economist will be invaluable as the new administration and the Fed attempt to help the labor market regain its pre-pandemic balance. … All in all, Ms Yellen will be a welcome addition to the administration at a time when the economy continues to be negatively affected by COVID-19 and needs continued support from monetary and fiscal policy. – Rubeela Farooqi, Chief US Economist at High Frequency Economics

Related:Mnuchin ends some emergency coronavirus loan programs

• “Investors should embrace former Fed Chairman Yellen as the next Treasury secretary. If nothing else, its stock market record is very good: the S&P 500 has compounded at 13% [per] year on a price basis during her tenure, even though she increased rates. Our only concern is that as a trained economist and former central banker, Yellen is not the kind of individual who will champion disruptive new technologies like a US central bank digital currency. China’s lead in this area will therefore continue to grow, with unforeseeable consequences for the greenback. »- Nicholas Colas, co-founder of DataTrek Research

• “The market reacted positively to the announcement of Yellen’s appointment. This reflects the market’s familiarity with Yellen as Fed chairman from 2014 to 2018.… We conclude by viewing Yellen’s appointment as a moderate selection, which should mitigate the risk of significant progressive rules or regulations disrupting business. banking and financial. service sectors. “- Edwin Groshans, Analyst at Height Capital Markets

• “Ultimately, the most critical will be whether the policies Biden promised are actually creating jobs across the country. The ultimate judgment of Yellen’s tenure at Treasury will be tied to his negotiation – on the global stage – of fair value for the dollar and fair trade. – Steven Blitz, Chief US Economist at TS Lombard

• “Yellen is a great choice for the Secretary of the Treasury. She was my boss when I was a senior economist for international relations at the Council of Economic Advisors in 1998-99. The wisest boss ever! – Nouriel Roubini, professor of economics at New York University often referred to as “Dr. Condemn, ” in a tweet

Read more:Yellen, dismissed by Trump, returns to center of economic policy

• “It’s great to see that there will be an experienced hand at @USTreasury. Every Treasury secretary has a learning curve (even former Fed chairmen), but it’s a great selection. – Tony Fratto, founder of Hamilton Place Strategies and former White House spokesman George W. Bush, in a tweet

This report was first published on November 23 and has been updated.



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