On the money: Yellen's next milestone is name on US currency

Faith in the U.S. dollar has often hinged in part on what Treasury Secretary Janet Yellen says. On Thursday, the focus will be on what she writes, as the government churns out its first currency bearing her signature.

Yellen loops her capital “J” and “Y,” with the rest of her name flowing in a haste that suggests handwriting might not have been the top priority for this pathbreaking economist.

She made her reputation as a stoic chair of the Federal Reserve and a shrewd forecaster, and now she's at the forefront of far-flung efforts to use economic levers to help stop Russia’s war in Ukraine, employ tax policy to protect the planet from climate change and oversee a massive effort to strengthen the beleaguered IRS.

That puts her at the center of domestic and global politics, inviting new levels of pressure and second-guessing by friends and foes. She is tackling this challenge as the United States is suffering from inflation that hit a 40-year high this summer and sowed fears of a coming recession.

Even as Yellen plans to watch the fresh bills carrying her signature roll out at the Bureau of Engraving and Printing’s Western currency facility in Forth Worth, Texas, her celebratory remarks were to dwell on Biden administration policy accomplishments rather than her status as the first woman to serve as treasury secretary.

On the Ukraine conflict instigated last February by Russian President Vladimir Putin, she said in prepared remarks, ”Together with over 30 countries, we have denied Russia revenue and resources it needs to fight its war.”

As for the domestic economy, she said, pandemic relief and a new law to boost production of semiconductors have positioned the U.S. “to capitalize on a wave of economic opportunities for the American people, including in communities often overlooked.”

Now, two years into Joe Biden’s presidency, Yellen has put to rest rumors she might be ready to leave the administration early and is strapping in for more economic — as well as political — battles ahead.

Along with managing Treasury’s role in the Ukraine war, she faces the Herculean task of revitalizing an IRS that is getting a $80 billion funding boost, and enforcing an anti-money laundering effort that requires documenting the beneficial owners of tens of millions of U.S. businesses in hopes of crushing corruption around the world.

She occupies an increasingly politicized role in which Congress and foreign governments matter as much as the financial markets.

Her Treasury Department is seeking to hobble the Russian economy with an oil price cap, as Republican House leader Kevin McCarthy of California is questioning the level of U.S. support for Ukraine. The Treasury is also putting together tens of billions in tax incentives, to address climate change, that have rankled some European allies and proved controversial with Republicans. And the wage gains in the most recent U.S. jobs report suggest the economy might have to endure more pain than expected to bring inflation back to the Fed’s target of 2% annually.

Along the way, Yellen has not shied away from controversy or speaking her mind on issues that many Americans look at solely through a cultural lens.

When Sen. Tim Scott, R-S.C., at a May congressional hearing told Yellen she was “harsh” for speaking about the positive economic impacts of abortion access for women, she replied, “This is not harsh, this is the truth.” She also has challenged the view that havens for hidden cash lie outside the U.S., instead arguing that the U.S. has become the “best place” to hide illicitly obtained money.

Yellen generated some tension with the White House this year when she veered somewhat from Biden’s insistence that his $1.9 trillion in coronavirus aid package did not contribute to inflation. Republican lawmakers have drawn on analyses by major economists such as Harvard University’s Larry Summers to say that the sum was excessive and sparked inflation. Breakages in the global supply chain and a jump in food and energy costs after Russia invaded Ukraine also have contributed to boosting prices to uncomfortable levels, putting the economy at heightened risk of a recession.

Yellen acknowledged on CNN in May that she had been “wrong then about the path that inflation would take.” Biden said he had been apprised of the possible risks of inflation when putting together the relief package, but he told The Associated Press in an interview that “the idea that it caused inflation is bizarre.”

Yellen’s predictions at the Treasury about financial markets on other points have been proved accurate.

Her warnings about the risks of a deregulated cryptocurrency market foresaw the recent chaos. Crypto markets have seen at least two major crashes, dozens of scams, Ponzi schemes and hundreds of billions of dollars made and evaporated overnight.

Yellen has also used her platform as a top government official to warn that despite women’s advancements in the workplace, a glass ceiling prevents many from advancing to the very top positions.

Yellen, who is the only person ever to lead the Treasury Department, the Federal Reserve and White House Council of Economic Advisers, still gets flak from members of both political parties for not being more dynamic and politically savvy at times and for being too direct at other times.

Anusha Chari, an economist who chairs the American Economic Association’s Committee on the Status of Women in the Economics Profession, calls Yellen’s signature on U.S. currency “a huge milestone, but it also shows us how far we have to go.”

The Treasury Department was created in 1789, and until Yellen only white men had led it.

Chari said “it’s an occasion we should celebrate — seeing Janet Yellen’s name on currency — but I wish it weren’t such a unique event for women.”

Yellen’s signature will appear alongside the name of U.S. Treasurer Lynn Malerba, the first Native American in the role. The bills are expected to be delivered to the Federal Reserve in December and will be in circulation next year.

Yellen says of the moment: “This is really not about me or Treasurer Malerba. To me, these notes represent the hard, ongoing work of the Treasury Department to strengthen our economy and advance our economic standing around the world.”

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Boak reported from Washington.