Soft-spoken Yellen wields outsize influence as Fed's No. 2

Sun Aug 5, 2012 10:01am EDT
 
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By Mark Felsenthal

WASHINGTON (Reuters) - If the Federal Reserve delivers another jolt of monetary stimulus to try to stir the U.S. economy back to life, it will be in part because of the powers of persuasion of a soft-spoken, former Berkeley professor.

From her corner office just down the hall from Chairman Ben Bernanke's, Janet Yellen is one of the most influential economic policymakers in the world, backing bold action by the U.S. central bank at a time when much of Washington treats "stimulus" as a dirty word.

With Congress and the White House locked in an election-year stand-off over spending and taxes, the Fed looks to be the only institution willing or able to stop the weak recovery from faltering yet again.

Power at the Fed is concentrated in a few hands - chief among them Bernanke and his No. 2 Yellen - even if the bank strives for consensus among its broader group of top officials.

That distillation of power makes Yellen hugely influential on policies that impact the world's largest economy and the rest of the globe.

"Her influence at the Fed has increased steadily," said Alfred Broaddus, a former president of the Richmond Federal Reserve who served with Yellen when she joined the Fed almost 20 years ago and often disagreed with her.

"I think she is now, along with the chairman and one or two others, one of the most influential people in the system," added Broaddus.

'DREAM COME TRUE'   Continued...

 
Janet L. Yellen, then president and chief operating officer of the Federal Reserve Bank of San Francisco, answers a reporter's question at the Town Hall Los Angeles forum in Los Angeles, in this March 23, 2010 file photo. If the Federal Reserve delivers another jolt of monetary stimulus to try to stir the U.S. economy back to life, it will be in part because of the powers of persuasion of a soft-spoken, former Berkeley professor. From her corner office just down the hall from Chairman Ben Bernanke's, Janet Yellen is one of the most influential economic policymakers in the world, backing bold action by the U.S. central bank at a time when much of Washington treats "stimulus" as a dirty word. Picture taken March 23, 2010. REUTERS/Mario Anzuoni/Files