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This past weekend, I had the opportunity to interview US Treasury Secretary Janet Yellen at the Texas Tribune Festival in Austin, Texas. Conversation took place at Saint David's Episcopal Church. If someone ha said to me, you're gonna interview the Treasury sectary and a church, but not, I have been on my not have been on my bingo card. As you probably know, Yellen has held a lot of important jobs over the
past few decades. Former Federal Reserve Chair, chief Economic Advisor to President Clinton as well and along the way President the Federal Reserve Bank of San Francisco. The accolades are many of the cv is long. In other words, Yellen is someone who knows a lot about what's going on in the US economy. So I began by asking her a really tough question, and let's create a little contrary. Let's have a hard conversation. How was the burger? The
burger in question was from Waburger. I noticed that a lot of Treasury Secretary of Janet Yellen's travels feature food in and out in California, a meal with magic mushrooms in China. Someone had posted a photo of yellin at Waburger, and I needed to know how Texas's favorite fast food chain stacked up.
They're both terrific in different ways, and loved Africa. It was excellent.
I promise my editor would make some headlines here today.
We're going to try to barbecue before we leave that excellent.
I'm not gonna let that.
Go by spoiler alert. I did not, in the end get Franklin barbecue with Janet Yellen, but I did get to ask her a lot of questions. Questions you might have two about the state of the economy, about US China relations, about a controversial takeover of US steel, and what Yellen hopes to accomplish before she leaves her post. Today on the podcast the seventy eighth Treasury Secretary Janet Yellen on everything from inflation to who does her taxes. I'm David Gerrat, and this is the big take from
Bloomberg News. My conversation with Janet Yellen on Saturday came on the heels of the August jobs report, which showed that the US economy added one hundred and forty two thousand jobs last month. That marks a significant slowdown. It was less than Wall Street expected, and it's a sign the US economy could be headed toward a recession. So I started by asking the Secretary what she made of that report.
Clearly, the pace of job creation has gone down, and that's something we should expect. The unemployment rate has moved up somewhat off it's very low level of I think it got down to three point four percent, but it's not common in the United States to have unemployment rates in the force, and it's what I think of is a full employment economy.
We're seeing continue decent.
Pace of hiring, fewer job openings, a lot fewer, but there was an enormous amount of disruption in the labor market we saw during the pandemic. So the labor market is less hot than it was in the hiring frenzy that took place as the economy opened up after the pandemic.
But one hundred and forty.
Thousand jobs, this is what you expect in an economy where you don't have a lot of unemployment and jobs need to be created for new entrance to the labor force. So nobody knows exactly what that magic number is. What do you need to see in terms of monthly job creation to hold the unemployment rate steady. But my guess is we're seeing something in that region. And I think this is what most people would call a soft landing, a soft landing.
This is the thing the Federal Reserve, under Yellen's successor J. Powell, has been trying desperately to accomplish to slow down the economy enough to get inflation under control, but not so much so that it tips into a recession. I pushed Yellen further on whether she's confident we're there, we're getting there.
I think what.
We're seeing now is consistent with that, and you know, while there are risks, it really has been amazing to be able to get inflation down as meaningfully as we have.
Secretary Yellen did tell me she's keeping an eye out for certain things. One of them is if LAYO increased dramatically. She also said she's particularly sensitive to the stress rising prices place on everyone, but especially on low income households. But overall, Yellen seems confident in how the US economy is doing. So I asked her about the rest of the world, and about China in particular. You know, I look at what you've done as Tressury secretary. You've approached
in a kind of like a diplomat. Treasury secretary is a diplomat. And I want to start by asking you
about your experience on US China relations. And so I didn't go on the trip with you there that you took to China, but I followed the coverage of it, and aside from the five thousand articles about the magic mushrooms that may have been on the meal that you that you ate there, she don't have to address here, and you've dressed that funny, there was this other thread that came out, and that is you were able to carry a tough message to your counterparts, and they seem to,
if not like you, hear you out spend time with you. These meetings, as they often do when you meet with counterparts in China, last almost days, they last hours. And I was thinking of something that I saw Alan Blinder, or your former colleague at the FED say about you, and that is Janet Yellen makes an argument on the merits and she sticks with it, and she's good at articulating an argument in a way that doesn't leave people
on the other side hopping mad at her. What is your secret as you think of embracing this role as a diplomat, What has made you particularly i'll say particularly good or have the.
Facility for well, thank you for the compliment. I've seen.
This sort of diplomatic initiative, both with China and with other countries as really critical because we need to work together collaboratively to solve every global problem that we face, from climate change to Russia's aggression, to issues that we have with China. And during the previous administration, I'm sorry to say, our alliance is fred and you know, it was America first, and that should really never be America alone. And it was necessary to rebuild alliances to work with
allies around the world. And that's been a broad that's been a broad effort, and I think we really have succeeded.
Do you foresee going back there as Treasury Secretary? Do you need to go back there?
I certainly may go back there. I you know, would welcome a visit by my Chinese counterpart.
Something else I was curious to ask Secretary Yelling about is a story that's been in the headlines a lot recently. That's the takeover of US Steel by Nippon Steele, the Japanese company. Bloomberg supported President Biden plans to block the four point one billion dollar deal, and Vice President Harris has also spoken out against it.
US Steel is an historic American company, and it is vital for our nation to maintain strong American steel companies. And I couldn't agree more with President Biden. US Steel should remain American owned, an American.
Operator, And in a rare moment of partisan unity, former President Donald Trump has said he also opposes the merger. Well Yellen haads a committee that reviews deals like this one to make sure there are no risks to US national security. And even though the Committee on Foreign Investment in the United States or SIPHIUS, operates under a shroud of secrecy, I wanted to see if she'd say anything about the US Steel deal. I hope she might be willing to give me a sense of the timetable, at least.
I'm not going to comment on the specifics. I I will say is that foreign direct investment in the United States is really important and by and large has been a huge positive for US, and it is a priority to maintain an open and healthy environment for foreign countries to invest in the United States, just as we're investing in many countries around the world. So that is the positive value. On the other hand, foreign investment in the United States can impose national security concerns.
Hey, I tried coming up after the break. Do you do your own taxes? I've always wondered, are you?
For most of my life?
I have, But it's gotten complicated.
It's got a little more complicated. But most of my life I've been to do it yourself.
I ask Secretary yelling about taxes and tax cheats and what's left on her to do list in the final months of President Biden's tenure.
Well, welcome, welcome to receive and control. You can smell the paper, all right.
I decided to ask Treasury Secretary Janet Yellen about her taxes because she'd made time on her trip to Texas to visit a huge IRS processing facility in Austin. The day before my interview. I tagged along with her as she met with workers at the site. Yellen greeted hundreds of them in a cafeteria that, during the pandemic, was filled with paper the processing center couldn't keep up.
Prior to this year, we were operating Malsartia machines over twenty years twenty years old, so very aged equipment. I used to call the technicians of those old machines mcgiver right because they were so aged we couldn't even get parts for them.
But now, as a result of the eighty billion dollars that have been allocated to the IRS under President Biden's Inflation Reduction Act, workers told Yellen the situation is much different.
Earlier this year, we were able to purchase new machines and install them, and that's what you see here in all of our processing sites. They actually run the mill faster, the sorting's more accurate. We're still learning to operate them a little bit, but much much improvement and definitely thank you to IRA Funds to be able to do all sorts.
Secretary Yellen got to see demonstrations of those new machines. Tax enforcement has been one of her key priorities at Treasury, and she told me at the end of that visit before she and her staff got lunch at another Texas institution, a Mexican restaurant called one in a Million that she's been pleased of late, with the.
Results something like one point three billion collected from very high income, high wealth people who either haven't paid their taxes or who have been assessed taxes and have unpaid bills.
One point three billion collected from high income people. That's a significant improvement from twenty nineteen, when the top one percent of wealthy Americans owed more than one fifth of all unpaid taxes. And it's an implicit rebuke to Republicans who want a cut funding to the irs. Back in the church, I wrapped up by asking Yellen what she's worried about, if she's paying close attention to any specific risks to the global financial system.
Overall, I would say for the US the kinds of metrics that we would monitor that would summarize risks, whether it's asset valuations or the degree of leverage. Look things look good, there are not. I don't see red lights flashing.
I wonder now, as we approach the end of President Biden's tenure, your tenure in this job, I should ask, or are you done at the end of this administration?
Probably done, but well we'll see.
Last question, Madam Secretary, is you approach the end of your tenure? Probably are What are one or two things on your very long to do. Listen, we've kind of touched on all of these things that are within your remit and that you're working on that you want to get done or feel that you have to get done before there is a change in leadership.
At Treasury, well, for example, we're working very hard to complete the rule writing that we need to do. There are huge programs that we're administering both at Treasury and in other agencies. We have the Semiconductor and Chips Act and been hearing a lot here in Austin. You know, we can continue to generate in areas where we care a lot about.
The Congress hasn't.
Legislated the programs that the President and Vice President have put forward. So housing is a huge issue. Affordable housing in many parts of the country critical priority. We need to use every tool we have to promote that agenda, and we are it's important for Congress to act to provide for additional construction of affordable housing. But we need to use every tool we have, and we're doing that childcare, healthcare.
You know, there are things that the executive can do and their area is still left to address.
You can watch my full hour long conversation with Secretary Jenny Yellen at Bloomberg dot com, where you can also find all our coverage of the Treasury Department. I'm David Gurra and this is the Big Take from Bloomberg News. This episode was produced by Thomas lou It was fact checked by the Big Take team. It was mixed by Blake Maples. Our senior producers are Naomi Shaven and Kim Gittleson, who also edited this episode. Nicole Beamster Boor is our
executive producer. Sage Bauman is our head of podcasts. If you like this episode, make sure to subscribe and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks so much for listening. We'll be back tomorrow.