Federal Reserve Chair Janet Yellen announced Monday that she plans to resign from the Fed Board of Governors.
Previously, Department of the Treasury Secretary Steven Mnuchin mentioned Yellen was still unsure whether she would serve out the remainder of her time of the Board of Governors after stepping down as Fed Chair.
Now, Yellen, who was appointed to the Board by former President Barack Obama to serve until January 21, 2024, announced she will resign upon the swearing in of her successor as Chair.
“It has been my great privilege and honor to serve in the Federal Reserve System over the course of three eventful decades – as a member of the Board of Governors, as President of the Federal Reserve Bank of San Francisco, and, most especially, as Vice Chair and Chair of the Board,” Yellen wrote in her resignation letter.
President Donald Trump recently tapped Federal Reserve Governor Jerome Powell to serve as the next Fed chair. Powell is now in the confirmation process.
Yellen’s term as Chair ends on February 3, 2018. She also serves as Chair of the Federal Open Market Committee.
It is unclear what this turn of events will mean for the federal funds rate in 2018. Capital Economics recently released its prediction, saying next year’s change in Fed Chair won’t matter, rates will still be raised four times.
However, this announcement leaves yet another opening at the Fed for Trump to fill. The positions open at the Fed go a lot further than only the Fed Chair. Mohamed El-Erian could be taking over for the departed Stanley Fischer as the next Fed vice chair.
“I am enormously proud to have worked alongside many dedicated and highly able women and men, particularly my predecessor as Chair, Ben S. Bernanke, whose leadership during the financial crisis and its aftermath was critical to restoring the soundness of our financial system and prosperity of our economy,” Yellen wrote in resignation letter.
Yellen has yet to announce her plans beyond leaving the Fed. Previously, she served as vice chair of the Board of Governors from October 2010 to February 2014 and as president of the Federal Reserve Bank of San Francisco from June 2004 to October 2010.
She was first appointed to the Board by former President Bill Clinton in August 1994 and served until February 1997 before she resigned to serve as chair of the president’s Council of Economic Advisors.
“As I prepare to leave the Board, I am gratified that the financial system is much stronger than a decade ago, better able to withstand future bouts of instability and continue supporting the economic aspirations of American families and businesses,” Yellen wrote. “I am also gratified by the substantial improvement in the economy since the crisis.”
“The economy has produced 17 million jobs, on net, over the past eight years and, by most metrics, is close to achieving the Federal Reserve’s statutory objectives of maximum employment and price stability,” she continued. “Of course, sustaining this progress will require continued monitoring of, and decisive to, newly emerging threats to financial and economic stability.”