Federal Reserve Chair Janet Yellen today announced that she will resign from the Federal Reserve Board once her successor, Jerome Powell, is sworn in.
Yellen is the first woman to serve as Fed chair. While her term as Fed chair ends in February, Yellen could have stayed on the board until 2024, serving out her 14-year term as a Fed governor. Instead she'll follow the practice of previous Fed leaders and leave the board once Powell becomes chairman.
Powell's nomination by President Trump marked the first time in decades that a president hasn't reappointed a chief of the central bank for a second term. The Senate Banking Committee is set to hold a hearing on Powell's nomination next week, but a vote has not been scheduled.
In a letter of resignation to Trump, Yellen said she is "gratified that the financial system is much stronger than a decade ago," and that the economy has improved substantially. Also in the letter, she pointed out that 17 million jobs have been added since the financial crisis and that the Fed is close to achieving it goals of "maximum employment and price stability."
Yellen is credited with helping move the U.S. economy to a firmer footing after the turbulence following the financial crisis. Her decision not to stay gives Trump an even greater opportunity to reshape the Federal Reserve Board. If he fills the remaining vacant positions, Trump will have appointed five of the seven members on the board of governors.
Yellen, who is 71, was initially appointed to the Fed board by President Clinton in 1994 and served until 1997, when she became chair of the President's Council of Economic Advisers. She was appointed again to the board by President Obama for a term that was due to end in 2024.
She served as vice chair of the Board of Governors under Ben Bernanke from October 2010 to February 2014, when Obama elevated her to the top job. Yellen was president of the Federal Reserve Bank of San Francisco from 2004 to 2010. She remains a professor emerita of the University of California Berkeley.