Job Biden’s pick of Janet Yellen as head of the US Treasury is “good news for the economy of the United States and the world economy,” Luis de Guindos, vice-president of the European Central Bank, said on Wednesday.
If her appointment is confirmed by the Senate, Janet Yellen will be the U.S. first female treasury secretary and be in charge of reviving the world’s largest economy, currently in recession due to the coronavirus pandemic.
The choice of Janet Yellen who headed the American Central Bank from 2014 to 2018 is “good news for the U.S. and the world economy,” de Guindos said, specifying he was speaking “in a personal capacity” during a presentation of ECB’s bi-annual report.
Economists expect that the U.S. GDP will decrease by around 4% in 2020. It would be the first annual decline since 2009, when the economy fell by 2.5% following the 2008 financial crisis.
“Janet Yellen knows perfectly well what the American economy needs” and “she is perfectly aware of the implications of the United States economic policies on the world economy,” the ECB Vice-President emphasised.
When she was leading the Federal Reserve, she was seen as “a dove” by the markets, less inclined than the “hawks” to raise interest rates to prevent inflation, and regarded as one of the key architects to steer the economy back on track when it was still recovering from the “Great Recession”.
Since the global shock caused by the Covid-19 pandemic, both the ECB and the Fed have come to the rescue with huge public loan guarantees, to support US and EU economies through the crisis.