Future Treasury Secretary in the Administration of the US President-elect Joe Biden , former head Federal Reserve System (FRS) Janet Yellen advised the country’s new authorities to fork out and spend more on supporting the economy during the coronavirus pandemic, writes Bloomberg .
After taking office in January, Yellen plans to work closely with the current head of the Fed Jerome Powell and maintain its soft monetary policy, expressed in low rates. For his part, the future minister is going to increase budgetary spending to support the most affected industries.
In doing so, Yellen may face some difficulties. They can begin as soon as her candidacy is confirmed in the Senate. In particular, representatives of Republican Party in the upper house of the American parliament with a large probabilities will take an interest in her future policy towards China, which many associates of the current president Donald Trump considered the main economic rival of the United States. At the same time, Yellen is known for a softer approach to Beijing.
If approved in office, the new finance minister may face opposition already in the White House administration. At the same time, it will come mainly not from Republicans, but from fellow Democratic parties – in the event of concessions to the opposition and a softening of the aid program. Accustomed to diplomatic negotiations during her tenure at the Fed, Yellen may not be ready for such pressure.
In the spring of this year, the United States launched two large-scale economic recovery programs at once. Under one of them, the government allocated two trillion dollars to help businesses and the public. The Fed, in turn, launched a quantitative easing program, and also allocated $ 2.3 trillion to lend to banks that provide loans to affected enterprises. Some of these funds were allocated from the budget.