By Barry Eitel
Federal Reserve Chair Janet Yellen announced Monday she will resign from the central bank once her term ends in February.
Last month, President Donald Trump said he would not nominate Yellen for a second term as chair of the Fed, breaking with decades of tradition. Instead, he nominated Jerome “Jay” Powell as chair, a Republican on the Fed’s board of directors who has voiced an economic philosophy similar to Yellen’s.
The Senate is scheduled to hold a confirmation hearing for Powell next week.
Once Yellen’s term is up in several months, she could have returned to her seat on the board of directors – her term as a governor ends in 2024.
Yellen, the first woman to serve as chair, oversaw a critical moment in American economic history as the country slowly recovered from the devastating financial crisis in 2008. In her resignation letter to Trump, she noted that a net of 17 million jobs have been created over the last eight years. She also mentioned that the economy is on track to reach the Fed’s definition of maximum employment and price stability.
"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," she wrote in the letter. "I am also gratified by the substantial improvement in the economy since the crisis."
After the departure of Yellen, who joined the Fed’s board in 2010 as vice chair, there will be four vacancies on the board for Trump to fill. The only remaining board member nominated by former President Barack Obama will be Lael Brainard. The Senate confirmed Trump nominee Randal Quarles to the board earlier this year, but the White House has not nominated any candidates to fill the three other open seats, soon to become four.