#Wall Street ready for Janet Yellen’s return to economic power

Despite some tough talk from Janet Yellen during her first confirmation hearing to take over the Treasury Department, Wall Street appears eager to have her back.

During more than three hours of testimony on Tuesday, Yellen pressed the case for the Biden administration’s $1.9 trillion economic stimulus plan, but also defended the idea of a corporate tax hike and made it clear she would break with the Trump administration’s aim to weaken the US dollar.

Such talk from the next Treasury chief would usually spook the finance sector, but stock markets popped during the hearing and stayed up, with investors calmed by the return of a steady and known quantity.

“Say what you will about Janet Yellen, but she’s Janet Yellen,” one hedge fund manager told The Post. “She’s going to do what she says she’s going to do and she won’t surprise anyone.”

Having served as Bill Clinton’s chief economic advisor and Barack Obama’s Federal Reserve Chair, the 74-year-old Yellen is a respected and trusted policymaker on both sides of the aisle and outside the Beltway.

“The market likes her as she’s predictable and will work with the Fed to keep the game going,” offered Thomas Thornton of Hedge Fund Telemetry, referring to the extremely accommodative stance that her successor at the Fed, Jay Powell, has taken to markets throughout his tenure and ramped up during the pandemic.

“We had low rates because she was slow and cautious to raise them further,” mused one macro trader. “Now we’re back to an almost zero-rate environment and she can borrow cheaply to pay for this bailout package. Her fingerprints are already all over this, why not let her manage it?”

Yellen also made it clear in her hearing that she sees the Treasury gig as having a mandate to bridge the gap between the surging markets and the flailing economy, a notion that even financiers appeared eager to embrace.

“This can’t go on forever,” said the hedge fund manager. “The economy needs to rebound or the bubble will burst. Yellen has proven that she can work between those two realities.”

Still, there are some concerns about Yellen’s return.

“There is risk that the market is overly confident with her at Treasury,” Thornton said. ”Remember, she did start the taper and if COVID becomes something in the rearview mirro, both her and Powell could slow the stimulus.”