Yelling at Yellen?
On Tuesday, Janet Yellen comes before the Senate Finance Committee for her confirmation hearing. We have no doubt that she will be confirmed first by the committee and then by the full Senate – she is of course a confirmation-hearing veteran, making minimal the chances of any surprises – let alone gaffes. However, she will be asked hard questions seeking to commit her to new policies and the answers will be more than informative. Much of the session will focus on fiscal policy with a heavy dose of questioning on Ms. Yellen’s views about the implication of large deficits, specific programs in the Biden stimulus plan, the types of taxes needed to offset the second Biden economic-development plan, and the extent to which the U.S. could, as former Treasury Secretary Rubin has suggested, issue very long-dated bonds and lots of them for as long as ultra-low rates prevail.