Central bankers to retail punters: who shaped markets in 2020

By StockHastix On Jan 3, 2021

</ifQrame></div><p></p> <div> <p>In an eventful year for global markets, some individuals (and one company) stand out. Here, the FT’s markets team picks out the notable protagonists, and the key person to watch in 2021.</p> <h2 class="n-content-heading-3">Jay Powell, Federal Reserve chairman</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F5e852368-1276-46d4-9da7-ecb1f940aab4.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/5e852368-1276-46d4-9da7-ecb1f940aab4" data-image-type="image" data-original-image-width="2400" data-original-image-height="1600" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F5e852368-1276-46d4-9da7-ecb1f940aab4.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F5e852368-1276-46d4-9da7-ecb1f940aab4.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F5e852368-1276-46d4-9da7-ecb1f940aab4.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Jay Powell earned himself the title of the “maestro” of central bankers © AP<br /> </figcaption></figure> <p>When the financial system began to creak at the start of March, the US central bank acted quickly to stave off a much more pronounced crisis.</p> <p>The Fed slashed policy rates to zero, pledged to buy an unlimited quantity of government debt and announced new lending facilities in rapid succession that forever changed its role in financial markets during periods of stress.</p> <p>In moving decisively, Mr Powell earned himself the title of the “maestro” of central bankers, according to Nick Maroutsos, head of global bonds at Janus Henderson.</p> <p>What comes next may prove more challenging. The Fed is facing tough questions about encouraging undue risk-taking and potentially adding fuel to risky asset bubbles. <em>Colby Smith</em></p> <h2 class="n-content-heading-3">Christine Lagarde, European Central Bank president</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img data-src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F14360a35-d7fe-47b3-8458-cb0484f274b9.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/14360a35-d7fe-47b3-8458-cb0484f274b9" data-image-type="image" data-original-image-width="2400" data-original-image-height="1600" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F14360a35-d7fe-47b3-8458-cb0484f274b9.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F14360a35-d7fe-47b3-8458-cb0484f274b9.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F14360a35-d7fe-47b3-8458-cb0484f274b9.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Christine Lagarde’s ill-chosen words poured fuel on a sell-off in bond markets © Thomas Lohnes/Getty<br /> </figcaption></figure> <p>Christine Lagarde found out the hard way in 2020 how sensitive markets are to every utterance by central bankers. When the then new ECB chief said in March that she was not there to “close the spreads” — or prevent big gaps opening between the borrowing costs of the eurozone’s stronger and weaker members — her words poured fuel on a sell-off in the region’s bond markets.</p> <p>Italy’s bonds dropped sharply, sending yields on their biggest ever one-day surge. Investors began to question whether the promise of Ms Lagarde’s predecessor Mario Draghi to do “whatever it takes” to keep the euro together still held. </p> <p>The ECB boss swiftly apologised and spent the rest of the year repairing the damage — with considerable success. Later in March, the central bank launched an €750bn emergency bond-buying effort, which has since been scaled up to €1.85tn. Spreads in the eurozone have collapsed. “It’s been a very steep learning curve, no question about that,” Ms Lagarde told the Financial Times in July. <em>Tommy Stubbington</em></p> <h2 class="n-content-heading-3">Angela Merkel, German chancellor</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc8b67509-81b8-4a54-81b5-a6294c5c02a2.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/c8b67509-81b8-4a54-81b5-a6294c5c02a2" data-image-type="image" data-original-image-width="1800" data-original-image-height="1200" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc8b67509-81b8-4a54-81b5-a6294c5c02a2.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc8b67509-81b8-4a54-81b5-a6294c5c02a2.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc8b67509-81b8-4a54-81b5-a6294c5c02a2.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Angela Merkel was one of the driving forces behind the €750bn EU recovery fund © Michael Kappeler/dpa<br /> </figcaption></figure> <p>Angela Merkel emerged in 2020 as an unlikely champion of joint borrowing by eurozone members. As one of the driving forces behind the €750bn EU recovery fund agreed in July, she was breaking with years of resistance to burden sharing between members of the currency bloc. </p> <p>For investors, the establishment of the fund was a powerful statement of solidarity, which along with the ECB’s stimulus efforts bolstered a recovery in riskier assets after March’s dramatic rout. It also ushered in a remaking of Europe’s bond markets, with the EU itself for the first time set to become one of the region’s largest borrowers. </p> <p>The existence of a pan-European safe asset could help bolster the euro’s role as a reserve currency. Ms Merkel’s conversion during the Covid crisis has taken the EU one step closer to fiscal integration. <em>Tommy Stubbington</em></p> <h2 class="n-content-heading-3">Masayoshi Son, SoftBank founder</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img data-src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1ead6aeb-fcc6-4c22-a8c8-726850f6651c.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/1ead6aeb-fcc6-4c22-a8c8-726850f6651c" data-image-type="image" data-original-image-width="2098" data-original-image-height="1399" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1ead6aeb-fcc6-4c22-a8c8-726850f6651c.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1ead6aeb-fcc6-4c22-a8c8-726850f6651c.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1ead6aeb-fcc6-4c22-a8c8-726850f6651c.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Masayoshi Son’s SoftBank earned itself the title of “Nasdaq whale” © Kiyoshi Ota/Bloomberg<br /> </figcaption></figure> <p>SoftBank’s heavy-handed foray into US equity options in mid-2020 forced investors to see the conglomerate’s role in global markets in a new light.</p> <p>In early September, the FT revealed that SoftBank had snapped up billions of dollars’ worth of derivatives linked to individual US tech stocks, earning it the title of “Nasdaq whale”. </p> <p>Under the direction of Mr Son, the conglomerate was buying options on such a large scale that it helped to drive up the entire underlying market, as banks selling the options were forced to buy stocks to hedge themselves, in what was described as a “tail wags the dog feedback loop”. SoftBank shareholders recoiled, and the unpredictable Japanese group later abandoned its bets. </p> <p>SoftBank is best known for punchy bets on privately held start-ups; investors now keep a closer eye on its activities in public markets. <em>Katie Martin</em></p> <h2 class="n-content-heading-3">Bill Ackman, Pershing Square manager</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc61d76de-e547-44c3-bf04-af2f4bf983aa.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/c61d76de-e547-44c3-bf04-af2f4bf983aa" data-image-type="image" data-original-image-width="1990" data-original-image-height="1326" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc61d76de-e547-44c3-bf04-af2f4bf983aa.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc61d76de-e547-44c3-bf04-af2f4bf983aa.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fc61d76de-e547-44c3-bf04-af2f4bf983aa.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Bill Ackman made a quick $2.6bn in the spring with a bet on a rout in the credit markets © Christopher Goodney/Bloomberg<br /> </figcaption></figure> <p>Hedge fund manager Bill Ackman has attracted plenty of attention in recent years, often for losing money. But in 2020 he scored one of the standout trades of the year, making a quick $2.6bn this spring with a bet on a rout in the credit markets.</p> <p>Mr Ackman, who had been growing increasingly worried in February about the effects of coronavirus, spent $27m buying credit default swap insurance on tens of billions of dollars of US and European corporate bonds, the first time he had placed bets using CDS since the financial crisis.</p> <p>As the pandemic began to hammer credit and equity markets, the value of these contracts soared. By the time Mr Ackman made an emotional appearance on CNBC on March 18, around the nadir of the market slump, he had already sold half his position.</p> <p>In the now-famous interview, Mr Ackman warned that “hell is coming” and that as many as 1m Americans could die if the government did not act, explaining that he had grown super-bearish after waking from a nightmare about the virus’s rapid spread. But in the same interview he also said he was aggressively buying stocks — another bet that was later vindicated — because he expected the Trump administration to tackle the economic fallout from the virus.</p> <p>Mr Ackman is enjoying a big turnround in his fortunes after four consecutive years of losses that included bad bets on pharmaceuticals group Valeant and a bet against nutritional supplement seller Herbalife. His gain of around 65 per cent this year makes his Pershing Square fund one of the world’s top-performing hedge funds. <em>Laurence Fletcher</em></p> <h2 class="n-content-heading-3">Carnival Corporation, cruise operator </h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img data-src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F729ace4e-7f6d-4f6c-a652-fb6c7675483a.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/729ace4e-7f6d-4f6c-a652-fb6c7675483a" data-image-type="image" data-original-image-width="2172" data-original-image-height="1448" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F729ace4e-7f6d-4f6c-a652-fb6c7675483a.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F729ace4e-7f6d-4f6c-a652-fb6c7675483a.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F729ace4e-7f6d-4f6c-a652-fb6c7675483a.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Carnival was one of the earliest corporate casualties of the coronavirus crisis. © Kazuhiro Nogi/AFP/Getty<br /> </figcaption></figure> <p>When surging coronavirus cases forced the <em>Diamond Princess </em>cruise ship into quarantine in February, it provided one of the first clear signs that Covid-19 was a problem beyond China’s borders. Carnival Corporation, the vessel’s owner, soon became one of the earliest corporate casualties of the coronavirus crisis.</p> <p>And yet just two months later, Carnival raised more than $6.5bn in debt and equity, demonstrating just how much the Federal Reserve had underpinned capital markets. A $4bn bond backed by the company’s cruise ships set a template that corporate America soon followed: pledging prized assets to unlock funding.</p> <p>Carnival encapsulated a year in which companies facing near-complete collapses in revenue could still raise billions of dollars in financing. It was at the forefront of many capital markets trends, from convertible bonds to post-vaccine announcement equity raises. And by November Carnival could once again borrow without pledging its assets, capping off a year in which it raised more than $16bn from debt and equity markets. <em>Robert Smith</em></p> <h2 class="n-content-heading-3">Prince Abdulaziz bin Salman, Saudi Arabia energy minister</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F49f2b384-5f2f-4b64-a72e-29f4bb85745d.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/49f2b384-5f2f-4b64-a72e-29f4bb85745d" data-image-type="image" data-original-image-width="2400" data-original-image-height="1600" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F49f2b384-5f2f-4b64-a72e-29f4bb85745d.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F49f2b384-5f2f-4b64-a72e-29f4bb85745d.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F49f2b384-5f2f-4b64-a72e-29f4bb85745d.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Prince Abdulaziz bin Salman led Saudi Arabia in launching an all-out price war that hammered the oil market © REUTERS<br /> </figcaption></figure> <p>The role of the Saudi Arabian energy minister is generally pretty straightforward: corral Opec and allies like Russia to assist you in managing oil supplies, keeping prices just high enough without overheating.</p> <p>But when diplomacy fails, what option do you have to respond?</p> <p>In March Prince Abdulaziz bin Salman, the half-brother of Crown Prince Mohammed bin Salman, decided to show allies and rivals alike. When Russia baulked at further production cuts in the early stages of the pandemic, Prince Abdulaziz led Saudi Arabia in launching an all-out price war that hammered the oil market even before lockdowns really started to slash oil demand.</p> <p>Brent crude did not so much fall as implode, losing 24 per cent in just one session and continuing to slide for the next six weeks.</p> <p>It ultimately took an intervention from US president Donald Trump, fearing for the future of the US oil industry, to get Prince Abdulaziz to change course. In April a deal was agreed for the largest ever production cut. But was Prince Abdulaziz’s price war a sign of things to come? <em>David Sheppard</em></p> <h2 class="n-content-heading-3">Berat Albayrak, former Turkey finance minister</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img data-src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fb5a5e26e-8460-4d8d-a96d-ce04032cf68a.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/b5a5e26e-8460-4d8d-a96d-ce04032cf68a" data-image-type="image" data-original-image-width="2256" data-original-image-height="1504" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fb5a5e26e-8460-4d8d-a96d-ce04032cf68a.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fb5a5e26e-8460-4d8d-a96d-ce04032cf68a.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fb5a5e26e-8460-4d8d-a96d-ce04032cf68a.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Berat Albayrak’s two-year tenure saw Turkey’s lira lose 46 per cent of its value © Mucahid Yapici/AP<br /> </figcaption></figure> <p>Turkey’s lira lost 46 per cent of its value during the two-year watch of Berat Albayrak, who quit as finance minister in November. Much of the blame belongs to his father-in-law, president Recep Tayyip Erdogan, whose obsession with credit-fuelled growth and deep aversion to higher interest rates has for years put strain on the currency. </p> <p>But Mr Albayrak, 42, was the driving force behind a disastrous attempt to hold the lira steady. Turkey’s central bank spent tens of billions of dollars on a failed intervention that left a deep hole in the country’s foreign-currency reserves. After Mr Albayrak’s resignation in November, the lira enjoyed its biggest one-day rise in two years.<em> Laura Pitel </em></p> <h2 class="n-content-heading-3">Dave Portnoy, stock market trader</h2> <figure class="n-content-image n-content-image--center p402_hide" style="width: 690px; max-width: 100%;"><img src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F9f5cd6e3-a864-46e5-bd40-6c306082857f.jpg?fit=scale-down&source=next&width=690" data-id="https://api.ft.com/content/815ffb2b-0af1-49ce-9492-22f60ef68979" data-image-type="image" data-original-image-width="690" data-original-image-height="460" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F9f5cd6e3-a864-46e5-bd40-6c306082857f.jpg?fit=scale-down&source=next&width=690 690w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F9f5cd6e3-a864-46e5-bd40-6c306082857f.jpg?fit=scale-down&source=next&width=315 315w" sizes="(min-width: 46.25em) 690px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Dave Portnoy embodied a new generation of have-a-go traders © Dave Portnoy/Twitter<br /> </figcaption></figure> <p>Amateur stock traders had a blowout year in 2020, particularly in the US, where bored sports betters branched out into markets in droves. Leading the pack was Dave Portnoy.</p> <p>With bravado, boisterous humour, a foul mouth and millions of social media followers, Mr Portnoy embodied a new generation of have-a-go traders, noisily and frequently reminding his fans that “stocks only go up”. From the end of March 2020, to the intense frustration of more cautious institutional fund managers, he was right.</p> <p>Aside from a few niche bets, Mr Portnoy and his acolytes are simply too small a force to move global markets. But this vibrant community has ridden the wave in stocks up to new record highs, and shows no sign of backing down. <em>Katie Martin</em></p> <h2 class="n-content-heading-3">Key figure of 2021: Janet Yellen</h2> <figure class="n-content-image n-content-image--full p402_hide" style="width: 700px; max-width: 100%;"><img data-src="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fa6727b1d-3793-447a-85bb-8309bf13514e.jpg?fit=scale-down&source=next&width=700" data-id="https://api.ft.com/content/a6727b1d-3793-447a-85bb-8309bf13514e" data-image-type="image" data-original-image-width="2400" data-original-image-height="1600" aria-hidden="true" alt="" data-srcset="https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fa6727b1d-3793-447a-85bb-8309bf13514e.jpg?fit=scale-down&source=next&width=700 700w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fa6727b1d-3793-447a-85bb-8309bf13514e.jpg?fit=scale-down&source=next&width=500 500w, https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Fa6727b1d-3793-447a-85bb-8309bf13514e.jpg?fit=scale-down&source=next&width=300 300w" sizes="(min-width: 76.25em) 700px, (min-width: 61.25em) 620px, (min-width: 46.25em) 700px, calc(100vw - 20px)"><figcaption class="n-content-image__caption"> Janet Yellen will assume the Treasury secretary role at a pivotal moment for the US economy © Andrew Harnik/AP<br /> </figcaption></figure> <p>If confirmed by the Senate as the next Treasury secretary early in 2021, Janet Yellen will become not only the first woman to hold the country’s top economic job but also the first person to have served at the helm of the Treasury, Federal Reserve and the Council of Economic Advisors. </p> <p>She will assume the role at a pivotal moment for the US economy. The recovery has begun to stall, the Fed has stretched monetary policy close to its limit and the coronavirus crisis continues to rage on. </p> <p>One focal point will be the fate of several lending facilities deployed jointly by the Treasury and Fed earlier this year. Outgoing Treasury secretary Steven Mnuchin refused to extend five programmes beyond their December 31 expiration date, despite pleas from investors. Mr Powell has also indicated his support to keep these facilities operational in case the volatility that roiled markets earlier this year returns. </p> <p>Investors expect Ms Yellen to work closely with Mr Powell to try to overcome resistance and get these back online in short order. <em>Colby Smith</em></p> </p><div class="stock-160" style="text-align: center; " id="stock-1814655380"><iframe src="https://cdn.plus500.com/Media/Buttons/Responsive/57113/index.html?set=Buy_Sell_Buttons&language=EN&country=GB&url=https%3A%2F%2Fwww.plus500.co.uk%2F%3Fid%3D128619%26pl%3D2&isRW=1" width="160" height="70" scrolling="no" frameborder="0" style="border:none">

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