Janet Yellen departs from office — as she leaves a trail of mess behind her

 The whiplash-inducing, “Hun­ger Games”-style race to become Donald Trump’s Treasury secretary made it easy for the media to ignore what has been going on with Janet Yellen — and the absolute mess she’s leaving for her successor.

Yellen — who, it was revealed Friday, will be replaced as Treasury secretary in January by hedge fund mogul Scott Bessent — was Joe Biden’s pick to run the office that is essentially the country’s CFO.

Indeed, it could be the most important cabinet position in the White House given the importance of the US economy. Americans put Trump in office largely over his handling of the economy during his first term — job growth and wages that kept place with a low inflation rate.

Despite her gold-plated résumé, Ivy League degrees, and time served as Fed chair, Yellen gave the country just the opposite. Her boss paid the price politically as the American people paid the price economically.

And according to my sources, the American people aren’t done paying the price for Yellen’s mismanagement even if most of the financial media is overlooking the fiscal time bomb she devised — one that could blow up once Trump takes office.

Specifically, my sources who follow the bond market say Yellen has been setting a trap for the incoming Trump administration through the way she financed the massive $1.8 trillion federal budget deficit that exploded during the Biden years with the accumulation of $36 trillion in debt.

Yellen has been moving away from long-term debt to finance the shortfalls to shorter-dated securities, essentially rolling over deficits with more and more Treasury bills instead of the normal way of debt issuance through 10- and 30-year debt.

That’s according to an analysis by Robbert van Batenburg of the influential Bear Traps Report, who estimates that around 30% of all debt is the short-term variety — aka 2-year and shorter notes — compared to 15% in 2023.

Didn’t lock in low rates

In an era of low interest rates, Yellen & Co. could have locked in relatively cheap interest payments for years by issuing more 10- and 30-year debt.

So why go there? Politics, according to Yellen’s Wall Street critics.

Because the Biden administration has taken spending to new and some say unsustainable levels, Yellen needed to engage in a bit of financial chicanery to keep interest rates low and not spook the stock market during an election year, her critics say.

If she had financed deficits with 10- and 30-year bonds, that would have caused a rise in interest rates that impact consumers, i.e. mortgages and credit cards.

https://nypost.com/2024/11/23/business/janet-yellen-exiting-office-leaving-mess-behind-for-trump-team/