Yellen disappointed not to get a second term as Fed chair

Yellen chairwoman of the Federal Reserve in Washington on Oct. 31 2017. LEXEY SWALL  NYT

When Janet Yellen leaves the U.S. Federal Reserve this weekend after four years as chair, her legacy will include having shattered a social barrier: She is the first woman to have led the world's most powerful central bank, a position that carries enormous sway over the global economy. Her supporters hail her effectiveness at pulling the central bank through the crisis then managing its way back out; detractors say she inflated financial bubbles to get there, the long-term effects of which will be disastrous.

Yellen tells CBS' "Sunday Morning" that the stock market, despite the Dow's 665-point drop Friday, is high, and that the financial system is in better shape to handle a sharp sell-off than it was during the 2008 financial crisis.

"We can not tolerate pervasive and persistent misconduct at any bank", outgoing Fed Chair Janet Yellen said in a statement, citing "recent and widespread consumer abuses and other compliance breakdowns". Powell is to be sworn in as chair tomorrow, February 5 at 9am.

In a break from past practice, Trump opted not to nominate Yellen to a second four-year term.

She cited changes put in place since that time, of which Trump has been critical.

Of her appointment at Brookings, Yellen said in the same statement that "I'm delighted to be joining the Brookings Institution".

Wells Fargo says Federal Reserve sanctions on the bank after a fake accounts scandal and other problems could reduce the embattled bank's profits by as much as $400 million this year.

"I made it clear that I would be willing to serve, so yes, I do feel a sense of disappointment" about not being renominated, Yellen said.

Trump was highly critical of Yellen during the 2016 election but praised her after becoming president.

Transcripts of Fed policy meetings from the fall of 2008, when Lehman Brothers' collapse ignited the most unsafe phase of the financial crisis, show that Ms. Yellen helped drive the Fed to unleash just about everything in its economic arsenal, including slashing its key short-term interest rate to a record low near zero.

Before becoming Fed chair in 2014, Yellen had served as the central bank's vice chair and was president of the Fed's San Francisco regional bank. Regulators can't allow "pervasive and persistent misconduct at any bank", Yellen said in a statement. Yellen and her fellow policy makers said this week that they expect inflation to rise this year and to hit their target "over the medium term".

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