Yellen Cites Treasury-Fed Coordination in New Crisis Campaign

2/2 © Bloomberg. Janet Yellen, chair of the U.S. Federal Reserve, listens to a question during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., U.S., on Wednesday, June 14, 2017. Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation. Photographer: Andrew Harrer/Bloomberg 2/2

(Bloomberg) -- Treasury Secretary Janet Yellen highlighted the past coordination between her new department and her previous fiefdom, the Federal Reserve, as she sought to rally the agency’s staff in battling an array of crises besetting the nation.

“Economics isn’t just something you find in a textbook,” she wrote in a memo to the 84,000 Treasury Department workers that was released on Tuesday. “Economic policy can be a potent tool to improve society. We can -- and should -- use it to address inequality, racism and climate change,” which along with Covid-19 are the four crises President Joe Biden has identified, she said.

Yellen, who was confirmed by the Senate late Monday, is spending her first full day in office in virtual meetings with both career and political leadership, and plans to take a “listening tour” of the department that she now leads.

While the Fed and Treasury staff “weren’t exactly” co-workers during the global financial crisis, “the two teams grew close,” she said in the memo.

“I remember participating in a countless string of late-night conference calls and admiring the dedication and creativity of Treasury’s experts. Your work helped save the economy from its worst crisis since the Depression,” Yellen said.

“Now,” she said, “we need to do it again.”

She is the first woman to lead the Treasury in its 231-year history -- she broke the glass ceiling at the Fed when she became it’s first female chair in 2014. She had served as head of the San Francisco Fed, and then a vice chair for the central bank, during the financial crisis and its aftermath from 2007 onward.

Yellen is now in charge of a department with responsibilities spanning tax policy and government spending to financial stability, economic sanctions and foreign-exchange policy. She was confirmed by the Senate 84-15 Monday evening.

Yellen promised in her staff memo to run an “inclusive” department, with plans to meet with each office over the coming weeks.

She also highlighted the economic imbalances that preceded the pandemic.

“People worry about a K-shaped recovery to the pandemic -- and that is a cause for concern,” she said, “but long before Covid-19 infected a single individual, we were living in a K-shaped economy, one where wealth built on wealth while certain segments of the population fell further and further behind.”

©2021 Bloomberg L.P.