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Treasury Secretary Janet Yellen is in a reflective mood as her decades long career in public service comes to an end.

Treasury Secretary Janet Yellen is in a reflective mood as her decades long career in public service comes to an end.

I just could not feel more positively about the contributions that good economic policy making can contribute to American welfare.

I just could not feel more positively about the contributions that good economic policy making can contribute to American welfare.

Yellen's path to the Treasury Department has been paved with some of the biggest and highest profile jobs in government. She was President Clinton's chief economic advisor, a Federal Reserve governor, and the head of the Federal Reserve Bank of San Francisco. President Obama picked her to be the Fed's Vice chair than chair, she is the first and only woman to have had that job, and the first and only woman to be Treasury Secretary, where she oversees a very broad portfolio. This week I traveled to Washington to interview Yellen live on Bloomberg Television and Radio and now.

Yellen's path to the Treasury Department has been paved with some of the biggest and highest profile jobs in government. She was President Clinton's chief economic advisor, a Federal Reserve governor, and the head of the Federal Reserve Bank of San Francisco. President Obama picked her to be the Fed's Vice chair than chair, she is the first and only woman to have had that job, and the first and only woman to be Treasury Secretary, where she oversees a very broad portfolio. This week I traveled to Washington to interview Yellen live on Bloomberg Television and Radio and now.

Our exclusive interview with Bloomberg's David Gourr. He sat down with the Treasury Secretary Janet Yellen as her post nears and then let's take a listen.

Our exclusive interview with Bloomberg's David Gourr. He sat down with the Treasury Secretary Janet Yellen as her post nears and then let's take a listen.

Here in the Treasure Department with Secretary Janet Yellen. Great to be with you and there's a lot I hope to cover.

Here in the Treasure Department with Secretary Janet Yellen. Great to be with you and there's a lot I hope to cover.

We talked about the economic warfare the US is waging in support of Ukraine, about Yellen's work on US China policy. Then when that live interview ended, we kept talking. Okay, we can continue now if we have for a few more moments. Thank you, about what she's accomplished and hasn't about threats to the Fed's independence, and many of the economic policies President elect Trump has put forward.

We talked about the economic warfare the US is waging in support of Ukraine, about Yellen's work on US China policy. Then when that live interview ended, we kept talking. Okay, we can continue now if we have for a few more moments. Thank you, about what she's accomplished and hasn't about threats to the Fed's independence, and many of the economic policies President elect Trump has put forward.

This is the big take from Bloomberg News.

This is the big take from Bloomberg News.

I'm David Gera, and today on the show, an exit interview with the seventy eighth Secretary of the Treasury, Jennet Yellen. Treasury Secretary Jane Yellen and I talked just a couple hours after we got the latest inflation report. The consumer price index for the month of November was in line with what economists expected. Prices ticked higher from October and on an annual basis. The last time we spoke, back in September, Yellen told me she was optimistic the Federal Reserve would be able to pull off a soft landing policymakers could get inflation under control without triggering a deep downturn. I asked her if she's still confident that'll happen.

I'm David Gera, and today on the show, an exit interview with the seventy eighth Secretary of the Treasury, Jennet Yellen. Treasury Secretary Jane Yellen and I talked just a couple hours after we got the latest inflation report. The consumer price index for the month of November was in line with what economists expected. Prices ticked higher from October and on an annual basis. The last time we spoke, back in September, Yellen told me she was optimistic the Federal Reserve would be able to pull off a soft landing policymakers could get inflation under control without triggering a deep downturn. I asked her if she's still confident that'll happen.

Well, Look, I think inflation has come down very substantially from the peaks it reached in twenty twenty one. In twenty twenty two, we're still a bit above but getting pretty close to the fid's two percent objectives. And I believe that the FED will continue to focus on inflation and take what if her actions proved to be necessary to keep inflation hitting toward their two percent target. We've been very fortunate so far that it hasn't been necessary to weaken the economy or create higher unemployment to accomplish that, and I hope that continues to be the case.

Well, Look, I think inflation has come down very substantially from the peaks it reached in twenty twenty one. In twenty twenty two, we're still a bit above but getting pretty close to the fid's two percent objectives. And I believe that the FED will continue to focus on inflation and take what if her actions proved to be necessary to keep inflation hitting toward their two percent target. We've been very fortunate so far that it hasn't been necessary to weaken the economy or create higher unemployment to accomplish that, and I hope that continues to be the case.

Jenny Yellen led the Federal Reserve from twenty fourteen to twenty eighteen, and given that, I wanted to get her thoughts on FED independence. President elect Trump has openly criticized the current FED chair, Jerome Powell, and Trump says a president should be able to weigh in on FED policies.

Jenny Yellen led the Federal Reserve from twenty fourteen to twenty eighteen, and given that, I wanted to get her thoughts on FED independence. President elect Trump has openly criticized the current FED chair, Jerome Powell, and Trump says a president should be able to weigh in on FED policies.

Are you confident that the FED will be able to withstand a more actively involved administration or other kinds of political pressures.

Are you confident that the FED will be able to withstand a more actively involved administration or other kinds of political pressures.

Well. Independence is absolutely central to the Fed's effectiveness, and I believe it's important that it remains an independent institution, that politics don't enter its making, and it remains accountable to Congress to explain how it's pursuing the goals that Congress is assigned to it. And in the area of monetary policy, it's price stability and maximum employment. And I spent many years of my career at the FED, and I can tell you that the FED is not a political institution and politics don't matter to its decision making. It's a highly professional organization with a very strong staff and a diverse group of policymakers who are trying their lowful best to figure out, given all the uncertainties afflicting the economy, what is the best path to achieve these goals and manage trade offs that they may face. And I think they've done a good job. And what general research shows is that independent central banks end up delivering better macroeconomic results, and not only on inflation, which you would expect, but also on real economic performance. And so you know, over the last oh I would say, thirty or forty years, the trend all around the globe has been toward shoring up the independence of central banks, and there's been a payoff. And I don't think that that's going to change.

Well. Independence is absolutely central to the Fed's effectiveness, and I believe it's important that it remains an independent institution, that politics don't enter its making, and it remains accountable to Congress to explain how it's pursuing the goals that Congress is assigned to it. And in the area of monetary policy, it's price stability and maximum employment. And I spent many years of my career at the FED, and I can tell you that the FED is not a political institution and politics don't matter to its decision making. It's a highly professional organization with a very strong staff and a diverse group of policymakers who are trying their lowful best to figure out, given all the uncertainties afflicting the economy, what is the best path to achieve these goals and manage trade offs that they may face. And I think they've done a good job. And what general research shows is that independent central banks end up delivering better macroeconomic results, and not only on inflation, which you would expect, but also on real economic performance. And so you know, over the last oh I would say, thirty or forty years, the trend all around the globe has been toward shoring up the independence of central banks, and there's been a payoff. And I don't think that that's going to change.

Jerome Powell's term as fedchair isn't up until twenty twenty six, and in a recent interview, President elect Trump says he has no plans to try to replace Powell before then. But a proposal that's gotten some attention by Scott Besson, Trump's pick to succeed Yell in the Treasury is for Trump to appoint a shadow fedchair.

Jerome Powell's term as fedchair isn't up until twenty twenty six, and in a recent interview, President elect Trump says he has no plans to try to replace Powell before then. But a proposal that's gotten some attention by Scott Besson, Trump's pick to succeed Yell in the Treasury is for Trump to appoint a shadow fedchair.

Do you see that as being just a potential nuisance or is there real risk to having somebody who's opining with some sense of authority about is monetary policy.

Do you see that as being just a potential nuisance or is there real risk to having somebody who's opining with some sense of authority about is monetary policy.

I think that this would create a great deal of confusion. And the AFORMC that makes monetary policy is a very capable and non political body, and I believe that they would go on and make the best possible decisions then they can, and would not be influenced by somebody outside the FED who was trying to play such a role. I think it could disrupt financial markets and have an adverse effect on economic performance. In the end, I don't think it would influence the FED.

I think that this would create a great deal of confusion. And the AFORMC that makes monetary policy is a very capable and non political body, and I believe that they would go on and make the best possible decisions then they can, and would not be influenced by somebody outside the FED who was trying to play such a role. I think it could disrupt financial markets and have an adverse effect on economic performance. In the end, I don't think it would influence the FED.

There's been a lot of talk about the dollar, the safety of the dollar as the global reserve currency, and I wonder if that's something that you think American should be preoccupied with, it's something that we hear about from the President elect and his team. Something else they've floated, as it's been put a mar Lago accord where you could get the US together with Europe and China and Japan maybe talk about domestic production had narrowed a trade deficits. Is there an appetite or an opportunity for that.

There's been a lot of talk about the dollar, the safety of the dollar as the global reserve currency, and I wonder if that's something that you think American should be preoccupied with, it's something that we hear about from the President elect and his team. Something else they've floated, as it's been put a mar Lago accord where you could get the US together with Europe and China and Japan maybe talk about domestic production had narrowed a trade deficits. Is there an appetite or an opportunity for that.

The use of the dollar in global transactions and financial markets and in trade is underpinned by a very strong US economy with deep and liquid capital markets, the role of treasuries as the safest asset in the world, the role of law, a well managed economy with low inflation and solid macroeconomic policy. And when you think about what other currencies could possibly replace the dollar, the list is short. Possibly there is no currency that at this point could possibly rival the dollar. And in terms of an agreement that could affect the value of the dollar, you know, the policy that our administration has articulated is that major country should have the value of their currencies determined in world markets. So intervention might be appropriate on occasion to counter extreme volatility, but we believe that it's best for markets to determine the value of the dollar.

The use of the dollar in global transactions and financial markets and in trade is underpinned by a very strong US economy with deep and liquid capital markets, the role of treasuries as the safest asset in the world, the role of law, a well managed economy with low inflation and solid macroeconomic policy. And when you think about what other currencies could possibly replace the dollar, the list is short. Possibly there is no currency that at this point could possibly rival the dollar. And in terms of an agreement that could affect the value of the dollar, you know, the policy that our administration has articulated is that major country should have the value of their currencies determined in world markets. So intervention might be appropriate on occasion to counter extreme volatility, but we believe that it's best for markets to determine the value of the dollar.

Coming up as Janet Yellen's tenure as Treasury Secretary comes to an end, how she's trying to protect some of the policies she's put in place, Trump proofing at the Treasury Department, Plus Yellen's thoughts on tariffs, the future of the relationship between the US and China, and her legacy.

Coming up as Janet Yellen's tenure as Treasury Secretary comes to an end, how she's trying to protect some of the policies she's put in place, Trump proofing at the Treasury Department, Plus Yellen's thoughts on tariffs, the future of the relationship between the US and China, and her legacy.

That's after the break.

That's after the break.

As Treasury Secretary, Janet Yellen has played a big role on the world stage. After Russia launched its full scale invasion of Ukraine in twenty twenty two, she worked with allies to impose a spate of sanctions. Right before my interview, Bloomberg reported the Biden administration is considering more sanctions, targeting Russia's oil exports and its shadow fleet of oil tankers, which have been an economic lifeline. I asked the Secretary if she could confirm that those discussions are underway.

As Treasury Secretary, Janet Yellen has played a big role on the world stage. After Russia launched its full scale invasion of Ukraine in twenty twenty two, she worked with allies to impose a spate of sanctions. Right before my interview, Bloomberg reported the Biden administration is considering more sanctions, targeting Russia's oil exports and its shadow fleet of oil tankers, which have been an economic lifeline. I asked the Secretary if she could confirm that those discussions are underway.

Well, let me say, we never preview sanctions, and we've constantly been tightening our sanctions on Russia. Our overall aim is to impair Russia's ability to continue conducting this brutal war, to try to deny it the military equipment. It needs to be able to do that, and we've taken a variety of steps to do it. But we have been focused since the outset on Russian oil revenue. It's a critical component of the Russian budget. Now, what's unusual about this moment is that the oil market seems to be well supplied.

Well, let me say, we never preview sanctions, and we've constantly been tightening our sanctions on Russia. Our overall aim is to impair Russia's ability to continue conducting this brutal war, to try to deny it the military equipment. It needs to be able to do that, and we've taken a variety of steps to do it. But we have been focused since the outset on Russian oil revenue. It's a critical component of the Russian budget. Now, what's unusual about this moment is that the oil market seems to be well supplied.

Prices are relatively cheap.

Prices are relatively cheap.

Prices are relatively low. Global demand is down, and there really has been an increase in supply. American firms have stepped up, we have vastly expanded oil production. OPEC countries like Saudi Arabia have excess capacity at this time. So the global oil market is softer and that creates possibly an opportunity.

Prices are relatively low. Global demand is down, and there really has been an increase in supply. American firms have stepped up, we have vastly expanded oil production. OPEC countries like Saudi Arabia have excess capacity at this time. So the global oil market is softer and that creates possibly an opportunity.

Let me pivot to China. And this has been a relationship.

Let me pivot to China. And this has been a relationship.

I think you've invested a lot of time and energy in kind of rebuilding a conduitive communication between Washington and Beijing. How much does that concern you if the efforts that you've put in to rehabilitate that relationship go to the wayside.

I think you've invested a lot of time and energy in kind of rebuilding a conduitive communication between Washington and Beijing. How much does that concern you if the efforts that you've put in to rehabilitate that relationship go to the wayside.

So I do think it's important to have ongoing communications at all levels, from the President and she talking to senior US officials to staff that need to communicate. Just having open channels of communication. I believe it will be seen as continuing to offer value. These are channels by which we can make clear what we're unhappy about, where our concerns are, and why we have them. We have significant concerns about Russia's economic policies that we discuss in these channels. We're also using these channels to build trust, in channels for cooperation so that we can work together where our interests coincide. So there's no question that we have serious concerns, both from a national security point of view and a broader economic view with China's behavior, but nevertheless, is the two largest economies in the world. It's critical to have open channels of communication. It helps avoid misunderstandings.

So I do think it's important to have ongoing communications at all levels, from the President and she talking to senior US officials to staff that need to communicate. Just having open channels of communication. I believe it will be seen as continuing to offer value. These are channels by which we can make clear what we're unhappy about, where our concerns are, and why we have them. We have significant concerns about Russia's economic policies that we discuss in these channels. We're also using these channels to build trust, in channels for cooperation so that we can work together where our interests coincide. So there's no question that we have serious concerns, both from a national security point of view and a broader economic view with China's behavior, but nevertheless, is the two largest economies in the world. It's critical to have open channels of communication. It helps avoid misunderstandings.

Given the relationship she's developed with Chinese policymakers, I asked Yellen what insights she has into how they may respond in the phase of President elect Trump's recent threats to impose broad, punitive tariffs on the US's biggest trading partners, including China.

Given the relationship she's developed with Chinese policymakers, I asked Yellen what insights she has into how they may respond in the phase of President elect Trump's recent threats to impose broad, punitive tariffs on the US's biggest trading partners, including China.

Well, I really don't want to make a forecast. Many countries, when they're faced with unilateral actions of that sort, look for ways to retaliate. My guess would be that they would do that we have in areas of concern where I've expressed repeatedly concerns with over capacity that is developed in Chinese advanced manufacturing industries and clean energy semiconductors and the like. We think it reflects active large subsidies that are flooding the world with exports and threaten to drive our firms out of business, and areas that we think are critical to our own future. We have put in place tariffs now they're strategic. They affected eighteen billion dollars worth of trade, certainly not all of our trade with China, but broad based tariffs. Almost all economists agree that what they will do is hurt us by raising prices, possibly substantially, and making it more expensive for firms that need inputs from China to be able to acquire them, and harm more competitiveness of firms that rely on those imports.

Well, I really don't want to make a forecast. Many countries, when they're faced with unilateral actions of that sort, look for ways to retaliate. My guess would be that they would do that we have in areas of concern where I've expressed repeatedly concerns with over capacity that is developed in Chinese advanced manufacturing industries and clean energy semiconductors and the like. We think it reflects active large subsidies that are flooding the world with exports and threaten to drive our firms out of business, and areas that we think are critical to our own future. We have put in place tariffs now they're strategic. They affected eighteen billion dollars worth of trade, certainly not all of our trade with China, but broad based tariffs. Almost all economists agree that what they will do is hurt us by raising prices, possibly substantially, and making it more expensive for firms that need inputs from China to be able to acquire them, and harm more competitiveness of firms that rely on those imports.

The person that Donald Trump is named is your presumptive successor, Scott. Doesn't it suggested that he wants to cut the deficit in half by twenty twenty eight?

The person that Donald Trump is named is your presumptive successor, Scott. Doesn't it suggested that he wants to cut the deficit in half by twenty twenty eight?

Is that necessary? Is that even possible?

Is that necessary? Is that even possible?

I guess what I'm asking more broadly, is how worried are you about the fiscal outlook at this point in time.

I guess what I'm asking more broadly, is how worried are you about the fiscal outlook at this point in time.

Well, I am concerned about the fiscal outlook, and I believe the deficit reduction is necessary to keep us on a sustainable fiscal course. Now, Congress hasn't really done anything to improve the fiscal outlook, and I think that's a shame. I'm disappointed in that, and I think Congress needs to work hard on that. We proposed a lot of pay for us that we think would fairly ask corporations, wealthy individuals to pay their fair share. We've negotiated an international tax agreement that would create a level playing field worldwide for multinationals, and that would be a revenue raising measure that I think would be very valuable. And there is certainly more.

Well, I am concerned about the fiscal outlook, and I believe the deficit reduction is necessary to keep us on a sustainable fiscal course. Now, Congress hasn't really done anything to improve the fiscal outlook, and I think that's a shame. I'm disappointed in that, and I think Congress needs to work hard on that. We proposed a lot of pay for us that we think would fairly ask corporations, wealthy individuals to pay their fair share. We've negotiated an international tax agreement that would create a level playing field worldwide for multinationals, and that would be a revenue raising measure that I think would be very valuable. And there is certainly more.

Jimmy Allen has had a path breaking career. I closed out our conversation by asking her what she's reflecting on as she wraps up decades in public service.

Jimmy Allen has had a path breaking career. I closed out our conversation by asking her what she's reflecting on as she wraps up decades in public service.

I feel terrific about the opportun tunities that I've had over the last four years to serve at Treasury and before that at the Federal Reserve in the Council of Economic Advisors during the Clinton years, and I just could not feel more positively about first of all the contributions that good economic policy making can contribute to American welfare. But beyond that, we have an excellent group of senior officials that we brought in.

I feel terrific about the opportun tunities that I've had over the last four years to serve at Treasury and before that at the Federal Reserve in the Council of Economic Advisors during the Clinton years, and I just could not feel more positively about first of all the contributions that good economic policy making can contribute to American welfare. But beyond that, we have an excellent group of senior officials that we brought in.

But what we found at.

But what we found at.

Treasury and have built is a civil servants who have deep expertise, knowledge, commitment, operate with integrity, and are able to do the kind of analysis and operational management that really serves our economy, will and financial markets. And this is a core asset of America that we have a devoted civil service that has great expertise and contributes to good performance. So as I look back on my career, that's really been important to me that.

Treasury and have built is a civil servants who have deep expertise, knowledge, commitment, operate with integrity, and are able to do the kind of analysis and operational management that really serves our economy, will and financial markets. And this is a core asset of America that we have a devoted civil service that has great expertise and contributes to good performance. So as I look back on my career, that's really been important to me that.

In Secretary, Thank you very much, Thank you.

In Secretary, Thank you very much, Thank you.

This is the Big Take from Bloomberg News. I'm David Gura.

This is the Big Take from Bloomberg News. I'm David Gura.

This episode is produced by Alex Segura, who also mixed and sound designed it. It was edited by Chris Antsy and Naomi Shavin, who's our senior producer. It was fact checked by Adriana Tapia. Our senior editor is Elizabeth Ponso, Our executive producer is Nicole Beamster Bor and Sage Bauman is Bloomberg's.

This episode is produced by Alex Segura, who also mixed and sound designed it. It was edited by Chris Antsy and Naomi Shavin, who's our senior producer. It was fact checked by Adriana Tapia. Our senior editor is Elizabeth Ponso, Our executive producer is Nicole Beamster Bor and Sage Bauman is Bloomberg's.

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