In April, two months after Janet Yellen took over as chair of the Federal Reserve Board, she went to New York to make her first speech to the financial industry. In a Times Square hotel ballroom, Yellen, a small woman with a helmet of white hair, sat on a three-tier dais, looking out over a hundred tables of paying guests. She was visually amplified by two Jumbotron screens, and read scripted remarks about her “expectation that the achievement of our economic objectives will likely require low real interest rates for some time.” It’s one of the institution’s central rituals for the chair to drop deliberately bland hints about the future direction of interest rates, and for the markets instantly to respond, as if on command of an omnipotent genie. In this case, the movement was upward. For Yellen, the speech was the equivalent of an incoming President’s reassuring State of the Union address.

This was not Yellen’s first full-dress official appearance. She had gone to Chicago a few weeks earlier, to speak at a conference for neighborhood-revitalization organizations—not the venue a new Fed chair would ordinarily choose for a maiden speech. Yellen was sending a signal. As she put it that day, “Although we work through financial markets, our goal is to help Main Street, not Wall Street.” More than five years after the financial crisis, historically high numbers of Americans are still out of the labor force, working part time when they’d rather be full time, or unemployed for more than six months. Yellen spoke mainly about unemployment, and told the stories of three blue-collar Chicagoans, two black, one white, who had lost their jobs in the recession. Her staff had found these people for her, and she had spoken to them on the phone before her speech. Two of the three—from Chicago’s desperately poor West Side—had criminal records.

The Federal Reserve Board celebrated its centennial last year. Its main activity has been to try to keep the economy of the United States healthy by making adjustments in interest rates, while also maintaining an atmosphere of dignified, scholastic, uncommunicative grandeur—it’s the Skull and Bones of American governance. Yellen is notable not only for being the first female Fed chair but also for being the most liberal since Marriner Eccles, who held the job during the Roosevelt and Truman Administrations. Ordinarily, the Fed’s role is to engender a sense of calm in the eternally jittery financial markets, not to crusade against urban poverty. The day after Yellen’s speech in Chicago, I visited her at the Fed’s headquarters, in Washington, in a classically inspired stone building with oversized bronze double doors facing Constitution Avenue. Sixty-seven years old, she has hazel eyes, sharp features, and an informal manner. She speaks with a distinct trace of old Brooklyn: “goyd” for guide, “wount” for wouldn’t. She recalled how she had decided where to make her first speech.

“I felt I wanted to talk about the Fed’s mission, and I wanted to do so in understandable terms,” she said. “And to emphasize that unemployment is part of our mission. The recession has taken a particularly heavy toll on those who have less education and income—middle-income and low-income families—and the Fed’s concern with the job market is a theme I’ve wanted to get across. Why are we doing all these things that are in the newspapers all the time? I was trying to explain that we’re doing this to help American families who are struggling in the aftermath of the Great Recession. I wanted to be completely clear and straightforward about what I’m talking about. Examples serve a very valuable role in making something that would seem abstract and general very down to earth. It’s pretty rare to just talk to people who are having a tough time in the economy, to hear their individual stories.”

Economic misfortune for ordinary people, and its connection to the financial system, has been on Yellen’s mind for most of her life. She was born in 1946, in the Bay Ridge section of Brooklyn. Her father, who had grown up on the Lower East Side, the son of immigrants from Poland, was a family doctor who had to go to medical school abroad because of the Jewish quotas that American medical schools maintained at the time; her mother, who grew up in Brooklyn, was an elementary-school teacher. “When I was very young, my father had an accident,” Yellen told me. “He fell down a flight of stairs, fractured his skull, and lost sight in one eye. In those days, family doctors went out on house calls. My father visited patients in their homes—and so that he could continue his practice my mother became his chauffeur. That continued for a good part of my life. My parents were born in 1906 and 1907. I think the experience of the Depression greatly influenced the way they thought about the world.” Her mother, she said, also managed the family finances and kept an eye on the stock market, and she thought some of that had rubbed off on her.

Yellen graduated, as valedictorian, from Fort Hamilton High School in Bay Ridge, in 1963—toward the end of the era of undimmed postwar optimism about the future of the United States, and in particular about the glorious potential of government. She went to Brown University, thinking she would pursue math or science (her only sibling, John Yellen, is the director of the archeology program at the National Science Foundation), but she wound up majoring in economics, which she talks about as if it were one of the helping professions. “What I really liked about economics was that it provided a rigorous, analytical way of thinking about issues that have great impact on people’s lives,” Yellen told me. “Economics is a subject that really relates to core aspects of human well-being, and there’s a methodology for thinking about these things. This was a very appealing combination to me. Market systems are capable of massive breakdowns that can result in long, devastating periods of high unemployment. And I felt that economists had really learned something about how to address that.”

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In her senior year, Yellen attended a talk by James Tobin, an economist at Yale who had served in John F. Kennedy’s White House. Tobin spoke about the “life-cycle model of consumption”—a theory about how much people spend and save at different stages of life, and what that means for the management of the economy. She was so entranced that she applied to graduate school at Yale so that she could study with him. “Tobin was a person who really impressed me, because he had a passion for social justice and for public policy,” she said. She noted that economists are sometimes legitimately criticized for engaging in abstract mathematics without caring much about its ramifications. “But for Tobin it was always something that was about making the lives of people better.”

In 1971, Yellen took a job as an assistant professor in the Harvard economics department. Like most junior faculty members at Harvard in those days, she did not get tenure, and when she was looking for the next step in her career she spent a year working at the Fed in Washington. She met her future husband there—George Akerlof, an economist at the University of California at Berkeley, who also had a temporary job at the Fed. They married at the end of the year and have been frequent professional collaborators ever since. (Their only child, Robert Akerlof, is an economist on the faculty of the University of Warwick, in England.) Akerlof and Yellen moved to England and taught at the London School of Economics for two years, then moved to Berkeley, where he returned to the faculty of the economics department and she joined the business school. She stopped teaching at Berkeley in 2004 and Akerlof retired in 2008. Akerlof, a 2001 Nobel Prize winner in economics, now does research at the International Monetary Fund, a few blocks away from Yellen’s office. His current interest is something he calls “identity economics,” which is the study of how people’s conceptions of who they are, including race, gender, and ethnicity, can shape their lives and decisions more than standard economic incentives.