But in recent months, inflation has eased, Democrats have surprisingly fared in midterm elections and pressure to make sweeping changes to Biden’s economic team has waned.
People close to Yellen, the first female Treasury secretary and chair of the Federal Reserve, also said she considered leaving for family reasons and because the Treasury job is very political — and it will become more so as Republicans take control of the House.
Administration officials said the question of whether to stay has also held up other talks about potential lower-level moves by the White House team.
“Janet is staying,” said a senior White House adviser. “So it’s settled.”
Another official close to Yellen said that while she considered returning to private life, she remained active about implementing policies enacted during Biden’s first two years. These include hundreds of millions of dollars in tax credits for electric cars and semiconductor manufacturers, and new money for the Internal Revenue Service tax. She was also the key person in the administration’s effort to put a global price cap on Russian oil exports.
One of its biggest battles will center around the need to raise the government’s debt limit later this year. Some conservative Republicans are calling for deep spending cuts first, and they hold more power in the House after concessions approved by the Speaker. Kevin McCarthy to secure the hammer.
“There’s a lot to do and a lot of it is going to be very difficult, and it’s good for the world that Janet is still around to do it,” said the second official close to Yellen.
Biden and Willen also face the prospect of the United States and other major economies slipping into recession as the Federal Reserve and other central banks raise interest rates to curb the biggest rise in inflation in decades.
Larry Summers, a former Treasury secretary who has in the past criticized some of the Biden administration’s spending policies, welcomed the news, calling Yellen “a great source of stability at the Treasury Department at a time when so much else in politics and economics is unstable globally and in the United States.”
Yellen’s conversation with Biden about the job was first reported today by Bloomberg News.
Yellen, one of the world’s foremost macroeconomists, joined the Biden administration in early 2021, as initial economic gains from congressional pandemic relief programs began to fade and new forms of Covid sent cases surging across the country.
In choosing Yellen, Biden relied on a well-known figure that most Democrats trusted and liked, respected by many Republicans, accepted on Wall Street and in keeping with the president’s unsurprising approach. It was overwhelmingly confirmed by the Senate, then instrumental in pushing Congress to approve $1.9 trillion in Covid relief spending, on top of the historic $4 trillion the government has already authorized.
But she also wielded less clout in the West Wing than her new-in-the-job predecessors, and sometimes found herself farther away from the White House, say people familiar with the matter.
Kate Davidson contributed to this report.