It’s not easy to get to a meeting with Janet Yellen in Washington. First you have to get past a number of hurdles as she he is heavily guarded by men with thick arms, thicker body armor and even thicker machine guns. Then you’ve made it into the polished corridors of the Fed’s headquarters, but if you’re a visitor, you’ll never be alone because there is always someone to accompany you every step of the way.
Wearing a large yellow name tag on your jacket identifies you to everyone as a visitor from far away. In the Fed’s corridors visitors walk — actually you stride — through cavernous rooms that are dimly lit, giving it the feel of a French castle. The sound of my sneakers on the fancy floors of the Fed has somehow disappeared, automatically adapting to the atmosphere of the building which seems to have a different center of gravity. It’s just hard to imagine any kind of squeak coming from my rubber soles on these majestic floors.
And then she is in front of me. She flashes a friendly smile and says: “Hi, I’m Janet Yellen.” It brings me back to reality in milliseconds.
Janet Yellen exudes an improbable coziness. You might think she is a small woman but in person she is larger than you would have thought. Her friendly face is full of laugh lines. No, this is not the number-crunching economist that you might expect to see in the leadership of the world’s most important and powerful central banks. The label “dove” somehow doesn’t feel like it’s the right description for Janet Yellen even if it’s only a term to describe her fiscal policies. “Doves” are the advocates of loose monetary policy and ardently believe that low-interest rates and cheap central bank money will stimulate the economy and reduce unemployment.
Today she is wearing a dark green suit with a plain gold chain. Her short white hair, seasoned with a touch of pixie, nicely accentuates her round face as well as her smile. Her whole manner is anything but obtrusive. She wouldn’t stand out in a supermarket checkout line. Yet at an age when many people are counting the days to retirement or already there, Yellen is reaching the pinnacle of her career. And she shows it. Yellen radiates an incredible sense of momentum and vitality.
Yellen’s manner in conversation goes beyond the professional — she is friendly, and speaks softly and rather quickly. She covers a wide range of topics, from the Lehman crash to the euro crisis, and explains her views of previous monetary policy. Knowing her counterpart in this discussion is from Berlin, she praises German politics while at the same time not shying away from a mild rebuke here and there.
While talking she weaves in an array of numbers, strategies and schools of thought. I can immediately imagine how the students must have felt back when she was teaching at Harvard. Among those students was a certain Larry Summers, her main rival for the job of Fed chairman last fall.
Janet Yellen is a professional politician in every sense. She is definitely not your old university kind of economist who can speak only in numbers and statistics. She even manages to give you the feeling that you are an old acquaintance, even if this is the first time she has ever seen your face, regardless of how many other people are in the room.
At the same time, she seems to have been registering every stirring and emotion coming from me. Almost unconsciously my brain is trying to shift to a higher gear when I’m in her company. I start to imagine that I’m probably being scanned and behaving the same way her students and fellow researchers did at the Nobel talent factories she was at: the London School of Economics, UC Berkeley and the legendary MIT.
Janet Yellen has a special mixture of friendliness and competence as she packs facts and figures into her sentences. And this sort of quiet brilliance was probably essential for a young woman with a Ph.D. from Yale to make the jump successfully from the world of academia into the male-dominated culture of the U.S. financial system.
New Yorkers who come from the Bronx sometimes have something edgy and a little tough about them. Yellen, who grew up in the Bronx, has left that all behind her. She might still sound like a New Yorker but her voice has a laid-back quality of a Californian now. The Bay-area lifestyle and her time at Berkeley must have softened her.
During her career Yellen made many journeys to various areas of the Federal Reserve. The call to the Valhalla of American policy came from then President Bill Clinton. He appointed her in 1997 as chairwoman of the White House’s Council of Economic Advisers.
Yellen has absolutely mastered a new form of power that is becoming more common these days, in which presence is the “new black.” Substance is clearly ahead of style nowadays, and it’s about not showing visible signs of power or wealth. But, if someone were mean-spirited, and wanted to attack her starting with her appearance, as has happened to Hillary Clinton, that person would end up having a hard time scoring any punches against Yellen. She definitely knows politics, she knows PR 2.0, and she obviously can handle the dangers of the Washington snake pit.
Yellen has been vice-chair of the Fed for about four years and is co-architect of her predecessor Bernanke’s policy of ultra-cheap money, the Fed’s weapon of choice to fight the effects of the financial and economic crisis.
So, what will she do? Will she continue the cautious departure from this policy? Quite a few people in the financial world wonder if Yellen is tough enough for the job. Others even worry that she might one day throw open the taps even further.
Due to the fact that Yellen is known to be a believer in supporting measures, others believe that she might be the right person to explain rising rates to the world. Whatever direction she is taking, not only do stock prices and the fate of banks depend on it, but so does the development of entire economies. If she chooses the wrong direction, she could even trigger an international financial crisis.
That’s why she can accurately be described as the most powerful woman in the world.
When Janet Yellen rises after 45 minutes, she smiles mischievously: “Give my greetings to Berlin, I hear it’s great these days!” Her eyes look down with lightning-speed, making a barely noticeable glance at my big yellow badge. “Cherno, this was fun.” “A picture?” A staffer materializes seemingly out of nowhere. Yellen says quietly, “Smile” and she thumps me when I do not smile spontaneously enough. My phone clicks softly and then she disappears.
A “political animal, a natural” (which is the highest praise in D.C.) has left the room. And I have to wait a few minutes until I am escorted out again.