How will the first female Treasury secretary in American history affect the market?

Yellen is only 1.52 meters tall, but no one dares to look down upon her. Yellen, 74, has successively become the first Fed chairman in American history and the first female Treasury secretary of the United States.

In 1946, Yellen was born in Brooklyn, New York, into a Jewish family with a strong knowledge atmosphere. Father Julius was a Polish immigrant and became a family doctor after coming to the United States. Mother Anna is an elementary school teacher.

Yellen has had extraordinary intelligence and learning ability since he was a child. When he was studying at Fort Hamilton High School, he was already a man of outstanding grades.

She received a bachelor's degree in economics from Brown University and a doctorate in economics from Yale University in 1967, and then served as an assistant professor at Yale University from 1971 to 1976. After working as a teaching assistant for a few years, Yellen was accepted by Yale alumnus and head of the International Finance Department of the Federal Reserve Ted. Truman liked it and invited him to join the Fed to study international currency reform. Yellen was only 31 years old at that time.

Dovish style

Since February 2014, Yellen has served as chairman of the Federal Reserve. During Yellen's tenure, he adopted a gradual increase in interest rates to maintain the stability of employment and prices in the US market. There was only one interest rate hike from 2015 to 2016, which to a certain extent reflects Yellen's dovish decision-making style.

During Yellen’s tenure, there were more than 200,000 jobs in the United States each month, the unemployment rate fell from 6.6% to 4.3%, and interest rates in the United States increased by 1 percentage point from March 2014. At the same time, the core inflation rate has been far below the Fed’s 2% target. As of April, the core inflation rate in the United States was 1.5%.

Yellen has always been as candid and transparent as possible when speaking publicly, so that investors can see their next move at a glance. And such an open and transparent environment is a great benefit to ordinary investors in the US stock and bond markets. Since Yellen took office in 2014, the "panic index" of the U.S. stock market has dropped to the lowest level in history, and the volatility of the market's ups and downs has been significantly reduced.

Over the past four years, Yellen has conducted full and effective communication with the market, and the process of normalizing monetary policy such as withdrawing from QE, gradually raising interest rates, and shrinking the balance sheet has been orderly. Facts have proved that in terms of the overall performance of the US economy after the financial crisis, Yellen's work results are widely recognized. The "dovish" view she insists on is considered a "friendly" attitude towards Wall Street and the US financial market.

Yellen is good for the stock market and employment

Yellen became a female finance minister, providing a boost for the stable development of the economy after the epidemic.

First, Yellen is a dovish fanatic, tends to promote employment rather than control inflation, and is good at gradual and fine-grained management of policies, and will not approve of rash interest rate hikes. Second, the new Fed chairpersons, Brainard and Yellen’s policy style Consistent; third, Yellen is conducive to the launch of a new round of fiscal stimulus plan, conducive to the stock market.

In the medium and long term, Yellen will help promote the implementation of the US fiscal stimulus policy. Fiscal policy and monetary policy coordinate and cooperate. In the future, due to the gradual recovery of demand, the price level will return to the currency phenomenon, and there will be certain inflationary pressure. However, the potential growth rate of the U.S. economy has declined, and the recovery of real profit levels may be limited, thereby dragging down the expansion of real demand and restricting the upward rate of inflation. Correspondingly, ample liquidity may seek low-valued, anti-inflation assets globally, and the allocation value of some commodities will appear.

Research institute Monita believes that Yellen advocates the use of large-scale fiscal stimulus policies, and has repeatedly stated in public that finance should play a greater role. Taking into account Yellen's influence in the Republican Party and academia, this also makes the introduction of fiscal stimulus policies much more likely. In terms of the specific structure, fiscal funds will be more inclined to employment. This is because Yellen's academic research is mainly in employment, so next year is expected to see a further decline in the unemployment rate in the United States.