WASHINGTON — Federal Reserve Chair Janet Yellen announced Monday that she will leave the central bank once she steps down as Fed chief in early February, though her term on the board doesn’t end until 2024.
The announcement comes nearly three weeks after President Donald Trump decided to nominate Fed Governor Jerome Powell as the next U.S. central bank head, replacing Yellen with a similarly minded but Republican chairman.
Yellen’s move means the agency will have a fourth vacancy it needs to fill. Trump has already installed a vice chair of supervision, Randal Quarles, on the Fed’s board and will have the opportunity to name his own vice chair and three more governors.
Other than Powell, the only remaining appointee of former President Barack Obama is Fed Governor Lael Brainard, once considered a front-runner to serve as Treasury secretary under a Hillary Clinton administration.
“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 the prosperity of our economy,” Yellen said in her resignation letter.
She cited evidence that the economy is much stronger than a decade ago, including 17 million net jobs produced in the past eight years.
“Of course, sustaining this progress will require continued monitoring of, and decisive responses to, newly emerging threats to financial and economy stability,” she added.
Yellen’s departure will mean the loss of decades of Fed institutional knowledge. She has been part of the central bank’s leadership since 1994, with a break from 1997 to 1999 to serve as chair of the Council of Economic Advisers under former President Bill Clinton.
She served on the Fed’s board from 1994 to 1997, as San Francisco Fed president from 2004 to 2010, as vice chair of the board from 2010 to 2014, and as chair since then.
Under her leadership, the U.S. unemployment rate dropped from 6.7 percent to 4.1 percent, in part because she decided to keep stimulating the economy even after unemployment dropped to 5 percent.