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Yellen gets post-Fed payday in private meetings with Wall St elite

Janet Yellen cashed in with a visit to Wall Street two months after stepping down as Federal Reserve chair, discussing the US economy and interest rates at events on Monday that included a dinner for 40 at a CEO’s Manhattan penthouse.

In a short telephone interview, Yellen, who ran the US central bank the last four years, said she revealed no confidential information. A person familiar with the events hosted by investment bank Jefferies, including the evening gathering put on by CEO Richard Handler, said it was her first such engagement since leaving the Fed.

“I talked about the economy and general perspectives on monetary policy,” Yellen said late on Wednesday. She said she was paid but declined to say how much, and did not provide details.

The program included a question-and-answer session with more than 100 Jefferies clients, where according to the source she stuck close to the gradual rate-hike message that her successor, Jerome Powell, has delivered since taking charge in early February.

Later, over the penthouse dinner of short ribs and matzo in the trendy Tribeca neighborhood, Yellen told executives from hedge funds, private equity firms and other companies that she considered inflation to be in check and unlikely to spike, so rates would stay relatively low, according to a second person familiar with the discussion.

The discussions with billionaires Carl Icahn, Daniel Loeb and other big investors ran past sunset until the college basketball final between Villanova and Michigan tipped off on TV, the second source said. Representatives for Icahn Enterprises and for Loeb, who runs Third Point, did not comment or respond to a request.

Cashing in after years in public service is a well-trodden path for policymakers and regulators, highlighting the demand among investors for any exclusive insights they can offer.

In the case of former Fed chiefs, who can earn an annual salary in one night and have no constraints on expressing their views provided they do not broach confidential matters, those insights could potentially move markets.

Yellen’s predecessor Ben Bernanke waited just over a month after leaving the Fed in 2014 before earning some $250,000 for a private talk in Abu Dhabi. He followed that up with similarly-priced private dinners with investors in New York, at which he predicted rates would remain low for a long time.

Former Fed Chair Alan Greenspan waited only a week after stepping down before addressing a private dinner in 2006 hosted by Lehman Brothers, the investment bank whose collapse two years later sent the global financial crisis into high gear.

Under Yellen, who earned just more than $200,000 per year as chair, the Fed finally turned the corner from its crisis-era policies of near-zero interest rates and trillions of dollars of bond-buying.

At Monday’s larger forum for Jefferies clients, she expressed the view that three or four rate rises were likely this year, and that recent U.S. tax cuts and a boost in government spending posed at least some risk of running the economy hot, according to the first source, who like the second source requested anonymity.

Reuters was not able to reach David Zervos, the Jefferies Group LLC chief strategist who conducted the forum and who later tweeted a link to a photograph of him with a smiling Yellen on Instagram. “An amazing evening last night hosting Janet Yellen for our clients in NY,” read the tweet, posted Tuesday.

The third meeting on Monday was with a group of women at Jefferies at which Yellen discussed being a female leader, said the second source.

The Fed raised rates last month at its first meeting under Powell, and forecasts showed policymakers were split between three or four total hikes this year as economic growth and inflation were seen rising.

Yellen joined the Brookings Institution think tank immediately after stepping down and spoke publicly there in February about the economy. Last month she discussed her Fed tenure at University of Pennsylvania.

In recent months, she was listed as a speaker-for-hire by the Washington Speakers Bureau, which did not respond to a request for comment.

Her profile page, alongside that of Bernanke and Greenspan, says she travels from Washington and fees vary based on event location.

Jonathan Spicer and Ann Saphir, "Yellen gets post-Fed payday in private meetings with Wall St elite," Business Recorder. 2018-04-06.
Keywords: Economics , Central bank , Equity firms , Public service , Economic growth , Interest rates , CEO