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Yellen to step down from Fed board when her successor as chair is sworn in

 (Pablo Martinez Monsivais / Associated Press)
(Pablo Martinez Monsivais / Associated Press)

Federal Reserve Chairwoman Janet L. Yellen submitted her resignation Monday, effective when her successor is sworn in, providing President Trump another seat to fill on the central bank’s board.

Trump decided not to renominate Yellen, 71, to lead the Fed, opting this month to tap Fed Gov. Jerome H. Powell instead.

Yellen’s four-year term as the first woman to chair the Fed Board of Governors expires on Feb. 3. Her term as a board member doesn’t end until January 2024 and she could have stayed on the Fed board until then.

But it’s standard practice for a Fed leader to step down once his or her term as chair ends. Yellen’s decision was expected and now will give Trump four seats to fill on the seven-member board.

One of Trump’s picks, Randal Quarles, took office last month.

In her resignation letter to Trump, Yellen said it was a “great privilege and honor” to serve at the Fed in different roles dating back to her first stint on the board from 1994-97. Yellen also was president of the Federal Reserve Bank of San Francisco from 2004-10.

She joined the board again in 2010 in the aftermath of the financial crisis and served as vice chair under Chairman Ben S. Bernanke.

Yellen was a strong ally of Bernanke as he kept interest rates near zero and had the Fed purchase trillions of dollars in bonds to try to stimulate the economy. She took over as chairwoman in 2014 after being nominated by former President Obama and continued to strongly advocate for the tougher financial regulations adopted after the crisis.

“As I prepare to leave the board, I am gratified that the financial system is much stronger than a decade ago, better able to withstand future bouts of instability and continue supporting the economic aspirations of American families and businesses,” she wrote to Trump. “I am also gratified by the substantial improvement in the economy since the crisis.”

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