Yellen turns focus inward at the Fed

Lauren Schneiderman

Federal Reserve Chairwoman Janet Yellen has turned the focus inward at the central bank, shifting away from the extensive outreach of predecessor Ben Bernanke.

Yellen has held few meetings with outside groups or lawmakers since taking the helm of the Fed in February, instead holding frequent staff meetings and calls with U.S. and international financial officials, calendar records obtained by The Hill show.

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Bernanke’s schedule, in contrast, read like a who’s who of Washington and the corporate world, as he met frequently with lawmakers and corporate chieftains to discuss policy and the economy.

While it is possible Yellen has made a priority of meeting with staffers as she settles in as chairwoman, she’s hardly a newcomer to the central bank.

Yellen was Bernanke’s second-in-command for more than three years and, before that, served as the head of the San Francisco Federal Reserve Bank and as the chairwoman of the White House’s Council of Economic Advisers.

The daily activities of Yellen are of great interest to financial executives and traders, who are tracking her every move as they seek clues about where she might steer monetary policy. 

That scrutiny will intensify on Wednesday as Yellen holds her second press conference as Fed chief. Observers are expecting an announcement about whether the central back will hit the gas on stimulus policies amid signs of a sluggish economy.

The press conference will also give Yellen a chance to move past a public debut in which she sent markets plunging by suggesting interest rates could rise in six months.

Behind the scenes, both Wall Street executives and consumer advocates say Yellen has brought a change in tone to the Fed.

In March, when 50 CEOs from some of the largest financial institutions flew to Washington to for a breakfast meeting, Yellen showed up early and began working the crowd. 

“She was very gracious, very well-received,” said Tim Pawlenty, the president and chief executive of the Financial Services Roundtable, which organized the meeting that was held at a hotel in the West End neighborhood near Georgetown. “She was scheduled to come at 7:30 and arrived early.” 

And then she stayed longer than her calendar suggests, Pawlenty said. Documents say the meeting was only supposed to last until 8:45 a.m.

“She made a presentation that was obviously prepared,” Pawlenty said, “but presented it in a way that was informal and somewhat more relaxed. The overall tone in the room and the respect for her was extremely positive.” 

Yellen appears to be bringing a more casual approach to the chairmanship than Bernanke. Lawmakers and outside groups who met with him say he was respectful and thoughtful in the role but kept relationships formal.

“He’s very, uh, reserved. We called each other ‘Mr. Chairman,’ ” said former Rep. Barney Frank (D-Mass.), who once served as chairman of the House Financial Services Committee, during an interview with The Hill in 2012. “I was on a first-name basis with [former Treasury Secretary] Hank Paulson before I was with him.”

Yellen told Congress that there would be a “high level of continuity” between her and Bernanke, but some advocates think she might steer the bank toward new priorities, such as consumer protection.

In the middle of a busy day of staff meetings, for example, Yellen met with the National Community Reinvestment Coalition, a collection of community organizations, faith-based and civil rights groups, and local and state governments.  

John Taylor, the group’s CEO, said he was impressed with Yellen after a one-hour meeting on March 10.

“It remains to be seen what her record will be, but her background suggests that these matters will be of more import to her,” he said. “She’s very forthcoming and very sympathetic to the issues that matter to us.”

Taylor said that Bernanke “didn’t demonstrate to us that [the Community Reinvestment Act] CRA and fair lending were priorities in his administration.”

“It’s a new day at the Fed not only in terms of who’s leading it, but who will be leading the consumer activities from a staff position, and we’re all very hopeful,” he said.

During a trip later that month to Chicago for a conference on community reinvestment and a meet-and-greet with Federal Reserve employees in the city, she toured the campus of a high-tech manufacturing program at a local community college.

The Hill obtained Yellen’s schedule from January through March of this year with a Freedom of Information (FOIA) request. She was sworn in as chairwoman of the Federal Reserve on Feb. 3. 

The Hill also obtained Bernanke’s calendars from 2009-2013 through several FOIA requests over the course of two years. They reflect a tumultuous time for the Fed, which was dealing with the financial crisis and the congressional push for Wall Street reforms that led to the passage of Dodd-Frank.

In addition to the regular meetings with staff, central bank leaders, global financial regulators and officials from the White House, Bernanke was known to take meetings with just about anyone.

His calendars during that time period show check-ins with lobbyists, banks, corporations, consumer advocacy groups and lawmakers, including some of the Fed’s most conservative critics, Reps. Patrick McHenry (R-N.C.) and Jeb Hensarling (R-Texas).

Yellen is beginning to make the rounds but appears to be starting off slow with lawmakers. 

She had a phone call with Rep. Maxine Waters (D-Calif.) on Feb. 7 and attended a Women’s History Month ceremony hosted by Rep. Nancy Pelosi (D-Calif.) on March 25.

While the first two months only tell part of the story, some who work with the Fed expect that Yellen’s focus on regulatory matters will continue. 

“In the next two years, they are going to be in a lot of internal discussions as they close out their the rule-making on Dodd-Frank,” said a financial services professional who had previously worked at a federal agency.