Janet Yellen

• 1. Introduction

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  Janet Yellen grew up in Bay Ridge, Brooklyn, in a row house where her father Julius, a family physician, ran his practice out of the ground floor. The daughter of a doctor and a schoolteacher who gave up her career to raise children, Yellen became something no American had ever been before: the only person in United States history to lead the Federal Reserve, the Council of Economic Advisers, and the Treasury Department. She was the first woman to hold every single one of those posts. How does a girl from a Brooklyn neighborhood reach the top of every major economic institution in the country? The answer runs through a high school newspaper, a Yale dissertation that became a legend among graduate students, a cafeteria meeting that changed the course of her career, and decades of arguments about unemployment that put her at odds with some of the most powerful men in American finance.

• 2. Brooklyn to New Haven

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  Fort Hamilton High School in Bay Ridge had a tradition: the editor of the student newspaper, The Pilot, would interview the class valedictorian. When Yellen graduated in 1963 as valedictorian, she handled the assignment herself, writing about herself in the third person. She had already earned a National Merit commendation, won one of 30 state Regents scholarships, received the mayor's citation for a scholarship, and been admitted to a selective science honors program at Columbia University where she studied mathematics on Saturday mornings voluntarily. The Pilot, under her leadership, extended its run as the first-place winner of the Columbia Scholastic Press Association contest to 13 straight years.

  At Pembroke College in Brown University, Yellen arrived intending to study philosophy. A single year changed that. Two professors, George Herbert Borts and Herschel Grossman, steered her toward economics, and she never looked back. She graduated summa cum laude and Phi Beta Kappa in 1967, then moved to Yale for her doctorate.

  At Yale, Yellen's meticulous note-taking during James Tobin's macroeconomics lectures became something close to folklore. Her notes were so thorough and so clear that they circulated among generations of graduate students as an unofficial textbook, referred to simply as "Yellen Notes." Tobin would later win the Nobel Memorial Prize. In 1971, Yellen was the only woman among roughly two dozen economists who completed their doctorates at Yale that year. Her dissertation, supervised by Tobin, carried the title Employment, Output and Capital Accumulation in an Open Economy: A Disequilibrium Approach. Nobel laureate Joseph Stiglitz, who taught her, later called her one of his brightest and most memorable students.

• 3. Harvard, London, and a Cafeteria

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  Yellen joined Harvard's economics department as an assistant professor in 1971, where she was one of only two women on the faculty. The other was Rachel McCulloch. The pair became close friends and wrote academic papers together. Six years later, when Harvard declined to grant her tenure, Yellen left Cambridge and took a position as a staff economist at the Federal Reserve Board, recruited by Edwin Truman, who had heard her oral examination at Yale and was taking over the Fed's Division of International Finance. She was assigned to research international monetary reform.

  In the Federal Reserve's cafeteria in 1977, Yellen met economist George Akerlof. They were married in June 1978, less than a year after meeting. By then, Akerlof had already accepted a position at the London School of Economics, and Yellen left her post at the Fed to accompany him. The LSE gave her a tenure-track lectureship. The couple spent two years in the United Kingdom before returning to the United States, partly because, as they described it, identity questions pulled at them: they felt American, not English.

  In 1980, Yellen joined the faculty at the University of California, Berkeley, at the Haas School of Business. She would earn the school's outstanding teaching award in 1985 and again in 1988. She became just the second woman in Berkeley-Haas history to earn tenure, in 1982, and was named a full professor in 1985. Twelve years after arriving, she was appointed the Bernard T. Rocca Jr. Professor of International Business and Trade.

• 4. The Science of Fair Pay

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  Running alongside Yellen's public career was a body of academic work that challenged some settled assumptions in economics. Since the 1980s, she and Akerlof investigated what economists call efficiency wage theory, the counterintuitive idea that paying workers above the market rate can actually increase their productivity. Their 1990 paper, "The Fair-Wage Effort Hypothesis and Unemployment," coined the phrase "fair wage effort hypothesis" and introduced the concept of a gift-exchange game: workers who are paid less than what they consider a fair wage will, deliberately and as a form of revenge on the employer, work less hard. Economists described the paper as a significant precursor to the broader efficiency wage literature.

  A 1996 paper co-written with Akerlof and Michael Katz, "An Analysis of Out-of-Wedlock Childbearing in the United States," pursued a different puzzle. Their theory, which they called "reproductive technology shock," argued that the expanded availability of both abortion and contraception in the late 1960s and early 1970s had eroded the social norms surrounding sex, pregnancy, and marriage. This shift, they contended, simultaneously reduced the stigma of unwed motherhood and encouraged biological fathers to step back from expectations of marital and paternal obligation.

  A 1998 report Yellen oversaw as chair of the Council of Economic Advisers, "Explaining Trends in the Gender Wage Gap," analyzed data from 1969 to 1996. The Council found that even after accounting for occupation, industry, and family status, a 25 percent gap between average pay for women and men remained unexplained. That gap had narrowed from 40 percent two decades earlier. The report concluded it bore no correlation to differences in productivity and was, therefore, the result of workforce discrimination.

• 5. Inside the Federal Reserve

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  On the 22nd of April 1994, President Bill Clinton announced his intention to nominate Yellen to the Federal Reserve Board of Governors. She and Alan Blinder were the first Democratic appointees to the Board since 1980. Clinton called her "one of the most prominent economists of her generation on the intersection of macroeconomics and labor markets." The Senate Banking Committee approved her by 18-1, with the lone dissenting vote coming from Senator Lauch Faircloth of North Carolina. The full Senate confirmed her 94-6. She was installed as the fourth female governor, and for the first time, two women sat on the Federal Reserve Board simultaneously.

  In July 1996, Yellen played a direct role in resisting pressure to raise interest rates as unemployment fell. She marshaled academic research to push back against Chairman Alan Greenspan's inclination toward a zero inflation policy, arguing that a low inflation rate of around 2 percent gave the central bank better tools for reducing unemployment and promoting growth than eliminating inflation entirely would.

  Yellen departed the Board in February 1997 to chair President Clinton's Council of Economic Advisers, becoming the second woman to hold that position, after Laura Tyson, a Berkeley colleague. In June 1999, she stepped down for personal reasons and returned to Berkeley, turning down an offer from Clinton to take over as the Fed's vice chair from Alice Rivlin.

  In 2004, Yellen returned to the Federal Reserve as president and chief executive of the Federal Reserve Bank of San Francisco, the largest of the 12 district banks in terms of population and economic output. She was the first woman to hold the position. At the San Francisco Fed, she privately sounded the alarm at internal Federal Open Market Committee meetings about banks' heavy concentration in construction and home-development loans, even as she downplayed those concerns publicly. She did not, however, push the San Francisco Fed to check what the source describes as the increasingly indiscriminate lending of Countrywide Financial, the country's largest lender at the time.

• 6. Chair of the Central Bank

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  The race to succeed Ben Bernanke as Federal Reserve chair became one of the more public succession battles in recent economic history. Lawrence Summers, former Treasury secretary and director of the National Economic Council, was the other leading contender. Media outlets reported the president was leaning toward Summers. But Summers drew criticism for his role in banking deregulation during the Clinton years and for remarks he made in 2005 as Harvard's president questioning women's aptitude in math and science. In July 2013, nearly a third of the 54 Senate Democratic caucus senators signed a letter pushing for Yellen. More than 500 professional economists from around 200 colleges and universities wrote a separate open letter to the White House. Summers withdrew in September.

  On the 9th of October 2013, President Obama officially nominated Yellen, making her the first vice chair ever elevated directly to the chairmanship. The Senate confirmed her on the 6th of January 2014, by a vote of 56-26, the narrowest margin for the position at that time. She was sworn in on the 3rd of February 2014. She was the first woman to lead the American central bank, the first Democrat to hold the post since Paul Volcker took it in 1979 under President Jimmy Carter, and only the second woman ever to lead a G8 central bank, after Russia's Elvira Nabiullina.

  During her single term, the unemployment rate fell from 6.7 percent to 4.1 percent, a drop of 2.6 percentage points, the largest decline under any Federal Reserve chair in the post-World War II period. For the first time in the Fed's history, the economy added jobs every month throughout a chair's entire tenure. On the 16th of December 2015, Yellen raised the key interest rate for the first time since 2006, departing from the accommodative policy that had defined the post-crisis years.

  On the 2nd of February 2018, on one of her final days as chair, Yellen imposed a consent order on Wells Fargo, then the third-largest U.S. bank, capping the firm's total assets until it resolved a fake-account scandal and other consumer abuses. It was the first time the Federal Reserve had imposed such a cap on the entire assets of a financial institution. President Trump, on the advice of Treasury Secretary Steven Mnuchin, chose Republican governor Jerome Powell as her successor, making Yellen only the second chair eligible for reappointment not to be renominated by the next administration. The first was Arthur F. Burns, nearly 40 years earlier.

• 7. Treasury and the Global Stage

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  President-elect Biden nominated Yellen as Treasury Secretary on the 30th of November 2020. The Senate Finance Committee approved her 26-0 on the 22nd of January 2021. The full Senate confirmed her 84-15 on January 25, and Vice President Kamala Harris administered the oath the following day. With that, Yellen became the first person in American history to have led all three of the country's most powerful economic bodies: the Treasury Department, the Federal Reserve, and the White House Council of Economic Advisers.

  In April 2021, Yellen proposed a global minimum corporate tax rate to prevent multinational companies from shifting profits to low-tax jurisdictions. On the 5th of June 2021, G7 finance ministers agreed to a minimum worldwide corporate tax rate of at least 15 percent. By October 2021, more than 130 countries representing over 90 percent of global GDP had signed on through the OECD, with the projected increase in annual tax revenues estimated at $150 billion. France's finance minister Bruno Le Maire described the initial G7 deal as "a starting point" that could be raised.

  Yellen was a central architect of the sanctions response to Russia's invasion of Ukraine in February 2022. She was a key proponent of the Russian oil price cap, which was designed to limit Kremlin revenues while keeping global oil supply flowing. On the 2nd of December 2022, the G7, the European Union, and Australia agreed to cap Russian oil at $60 per barrel, with a mechanism to maintain the ceiling at least 5 percent below average market prices. On the 27th of February 2023, Yellen made a surprise visit to Kyiv, meeting Ukrainian President Volodymyr Zelenskyy and Prime Minister Denys Shmyhal. She announced the rollout of roughly $1.25 billion in budget relief, the first installment of a $10 billion civilian assistance package.

  Between July 6 and 9, 2023, Yellen visited China, the first U.S. Treasury secretary to make the trip in four years. She met with former vice premier Liu He, People's Bank of China governor Yi Gang, Premier Li Qiang, Vice Premier He Lifeng, finance minister Liu Kun, and CCP central bank chief Pan Gongsheng. In a press conference after the four-day visit, she described it as having brought U.S.-China ties closer to a "surer footing." The American Economic Association's decision to name its Janet L. Yellen Award for Excellence in Public Service in her honor in January 2026, with her as the inaugural recipient, marked a recognition that stretched well beyond any single term in office.