The Wall Street Journal on Monday afternoon reported that Biden tapped Yellen, an economist who was the first woman to lead the Federal Reserve, to lead the economic recovery stemming from the coronavirus pandemic.
Last week, reports surfaced that Biden planned to choose a candidate that would appeal to all camps within the Democratic party.
As Federal Reserve Chair, Yellen worked to bring stability to the economic market in the wake of the housing crisis of 2008. Yellen oversaw a program to sell Treasury and mortgage bonds that the Fed had purchased to stimulate the economy.
In 2018, President Trump declined to nominate her for a second term. Jerome Powell replaced her as Federal Reserve Chairman.
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In a speech in 2018, Yellen reflected on the 10 years that followed the housing crisis.
“In retrospect, mortgage borrowing was clearly too easy for some households in the mid-2000s, resulting in debt burdens that were unsustainable and ultimately damaging to the financial system. Currently, many factors are likely affecting mortgage lending, including changes in market perceptions of the risk associated with mortgage lending; changes in practices at the government-sponsored enterprises and the Federal Housing Administration; changes in technology that may be contributing to entry by nonbank lenders; changes in consumer protection regulations; and, perhaps to a limited degree, changes in capital and liquidity regulations within the banking sector. These issues are complex and interact with a broader set of challenges related to the domestic housing finance system.”
If confirmed, Yellen will be tasked with stimulating an economy characterized by millions out of work, slowing job gains, and several million homeowners in foreclosure. Economists at JPMorgan Chase last week said they expect the economy to contract even further in the first quarter of the year due to an uptick in coronavirus infections.
On the bright side, the systemic housing-related issues she faced as a member of the Federal Reserve Board aren’t of great concern these days. Credit standards are robust, banks and nonbank lenders have strong levels of liquidity, and delinquency rates are relatively low given the broader economic crisis.