Yellen ‘likely to end’ as Biden ends term, could meet with Chinese counterpart soon

By David Lawder

(Reuters) – U.S. Treasury Secretary Janet Yellen said on Saturday she would “likely retire” from top-level government duties after President Joe Biden’s term ends in January, but would likely meet again with her Chinese counterpart soon.

Asked at the Texas Tribune Festival in Austin, Texas, if she was “done” when a new administration takes office in January, or if she might continue working or take on a new administrative role, Yellen said: “Probably done, but … we’ll see.”

The comments are the closest Yellen, 78, has come to saying about her future plans as the presidential race between Vice President Kamala Harris and former President Donald Trump heats up. Yellen was the first woman to serve as Treasury secretary, chairwoman of the Federal Reserve and director of the White House National Economic Council.

Yellen said at the Austin event that she still has a lot of work to do at the Treasury in the coming months, including likely another meeting with Chinese Vice Premier He Lifeng, her counterpart in Beijing, to try to straighten out the often tense relationship.

The two ministers met in Beijing in April, where Yellen warned China to curb industrial excess capacity before Biden moves to impose significant tariffs on Chinese electric vehicles, batteries, solar products and semiconductors.

Yellen said she would love to visit the U.S. but may also return to China herself, adding: “My view is that we will visit China one way or another.”

Treasury’s top economic diplomat, Undersecretary Jay Shambaugh, will lead a delegation to Beijing “very soon” to discuss economic issues. Shambaugh leads a U.S.-China economic task force that has made addressing China’s factory overcapacity a priority

Yellen said the US-China relationship “must be prioritized and nurtured” by the next US administration, through discussions at the highest levels and among agency staff.

“We have enough differences, and without a chance to discuss them and put them in context, there’s certainly the potential for tensions to build,” Yellen said. “That’s something that really needs to be addressed on a continuing basis. I hope that happens.”

‘SOLID ECONOMY’

Yellen also said the U.S. economy largely achieved a “soft landing” on lower inflation after U.S. payroll data for August released on Friday showed a slight decline in the unemployment rate despite a slower pace of hiring.

“When you see the pace of job creation decelerating over time, what I like to see is that it stabilizes roughly where it is now, and we need to be careful to make sure that it doesn’t weaken further,” Yellen said.

She said consumer spending remains “fairly solid” and while there is “less frenetic” hiring, there are no significant layoffs.

“I am alert to downside risks on the employment side right now, but I think what we are seeing and will continue to see is a good, solid economy,” Yellen said.

(Reporting by David Lawder; editing by Diane Craft and David Gregorio)