Transcript: US Treasury Secretary Janet Yellen on the next steps for Russia sanctions and ‘friend-shoring’ supply chains

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Janet L. Yellen
US Secretary of the Treasury

Frederick Kempe
President and CEO, Atlantic Council

Rana Foroohar
Associate Editor
, Financial Times

Closing remarks
Josh Lipsky
Director, GeoEconomics Center, Atlantic Council

FREDERICK KEMPE: Good morning. I’m Fred Kempe, president and CEO of the Atlantic Council. And I’m delighted to welcome you today to this special edition of Atlantic Council Front Page, our premier platform for global leaders. This morning we, at the Atlantic Council, have the honor of hosting Janet Yellen, America’s seventy-eighth secretary of the treasury.

Today’s event comes at a precarious moment. Russia’s brutal invasion of Ukraine has shocked the world and galvanized a swift and unprecedented economic response. In one week, the world’s finance ministers of central bank governors will gather here in Washington for the IMF and World Bank meetings. Russia will be front of mind, but so too will be the pandemic, energy prices, inflation—we’ve just learned that we’ve hit the highest mark of inflation in forty-one years—supply chain disruptions, food shortages, and the need to build a more resilient global economy in the decade ahead.

It is fitting then, Madam Secretary, that you have joined us today. Your mandate of promoting a stable economy, protecting the integrity of the financial system, and strengthening our national security are at the heart of the Atlantic Council’s mission. Six decades ago—and it is our sixtieth anniversary this year—the founders of the Atlantic Council were keenly aware of the vital role the US economy plays in achieving prosperity. Based on how powerful the US can be when it acts in partnership with its allies, we need only look at the sweeping sanctions since Putin launched his war on Ukraine to see the wisdom in that foresight.

And while the global economy is very different today than it was in the 1950s, some principles hold true. One is that finance and foreign policy and national security are interconnected. We, at the Atlantic Council, are proud that our GeoEconomics Center, led by the remarkable Senior Director Josh Lipsky and his incredible team, has been leading the charge in deepening the understanding of this connection. Few people in the world understand this interconnection better than our guest and our speaker today.

Secretary Yellen holds unmatched record—an unmatched record in the public service—in public service in the economic realm of this country. She was the fifteenth chair of the US Federal Reserve, the chair of the White House Council of Economic Advisers, president of the Federal Reserve Bank of San Francisco. She was the first woman in each of these positions, just as is the case as treasury secretary. But what many overlook is that she was also the first person of whatever gender in American history to have served in all of these roles. So she is a trailblazer.

Her record of public service is matched by her enormous contributions in the field of economics during her extraordinarily impressive academic career. From understanding labor markets to evaluating international trade, her research has detailed the fault lines in the modern global economy, and it’s looked for ways to fix them.

Since January of 2021, Secretary Yellen has helped lead the Biden administration’s economic-recovery efforts on both the domestic and international fronts. Just last year she brokered a historic agreement among 130 countries on international tax, which is something many, including me, thought could never be done. Her career is one of breaking down barriers and of building bridges.

Secretary Yellen, we are eager to hear from you. And thank you for joining us.

Following her speech, Secretary Yellen will join Rana Foroohar of the Financial Times for a conversation. There could not be a finer international journalist, author, and columnist to engage Secretary Yellen.

But first, Secretary Yellen, the floor is yours.

SECRETARY JANET YELLEN: Thank you so much, Fred, for that lovely introduction. And thanks to the Atlantic Council for hosting me today.

The course of the global economy over the past two years has been shaped by COVID-19 and our efforts to fight the pandemic. It’s now evident, though, that the war between Russia and Ukraine has redrawn the contours of the world economic outlook. Vladimir Putin’s unprovoked attack on Ukraine and its people is taking a devastating human toll, with lives tragically lost, families internally displaced or becoming refugees, and communities and cities destroyed.

The atrocities in Bucha are the latest grim reminder of the brutality of Putin’s war of choice. Its impacts are reverberating to neighboring countries and beyond.

The Biden Administration stands firmly with the people of Ukraine as they defend their lives, their homes, and their country. We are resolute in our commitment to hold Russia accountable.

Russia’s horrific conduct has violated international law, including core tenets of the U.N. Charter, challenging countries to demonstrate where they stand with respect to the international order that has been built since World War II. Therefore, when I speak about a changed global outlook, I’m not just talking about growth forecasts. I’m also referring to our conception of international cooperation going forward.

I’ll focus my remarks today on the significance of international cooperation in this current environment and for the future. The power of working together with our partners has been essential in confronting Russia. We need to take that lesson on board as we tackle the most pressing global issues we face today.

We’ve seen that swift and sweeping sanctions can have enormous force. The United States, along with over thirty countries, representing well over half the world’s economy, has imposed an unprecedented suite of financial sanctions and export controls on Russia.

The multilateral approach that President Biden has taken has enabled us to impose significant costs on Russia, degrading its ability to prosecute this war and to project power in the years ahead. We were able to do this, for example, because the G7 plus the European Union account for about half of Russia’s international trade, and our financial institutions have facilitated most of Russia’s trade and investment finance. We, the sanctioning countries, are saying to Russia that, having flaunted the rules, norms, and values that underpin the international economy, we will no longer extend to you the privilege of trading or investing with us.

By joining together, we demonstrate that these sanctions are not motivated by any one country’s foreign policy objectives. Rather, we are acting in support of our principles: our opposition to aggression, widespread violence against civilians, and in alignment with our commitment to a rules-based global order that protects peace and prosperity.

Moreover, we are carving new paths in our technical work to target, monitor, and enforce sanctions. The work of our team of experts at Treasury is now reinforced by other experts around the world. With Attorney General Garland, I convened a novel task force of law enforcement and finance ministry leaders from G7 and partner countries to advance our efforts. And together, we’re learning how to be more effective. We’re creating new habits of cooperation, trust, and goodwill that create positive spillovers across the entirety of our relationship.

Rest assured, until Putin ends his heinous war of choice, the Biden administration will work with our partners to push Russia further towards economic, financial, and strategic isolation. The Kremlin will be forced to choose between propping up its economy or funding the continuation of Putin’s brutal war.

At the same time, we are marshaling the power of international cooperation to mitigate the economic impacts of Russia’s war. Russia’s invasion will have direct impacts on the global economy due to the contraction of Ukrainian and Russian exports—particularly energy, food, fertilizer, and other commodities. When Russia made the decision to invade Ukraine, it predestined an exit from the global financial system. Russian leaders knew that we would impose severe sanctions, even if they underestimated the breadth, depth, and coordination of the actions that the United States and its allies would take. We’re now seeing higher commodity prices that have added to global inflationary pressures and are posing threats to energy and food security, trade flows, and external balances across many countries.

Much of our work next week during the IMF and World Bank spring meetings will be centered on how we can better support developing countries as they weather these shocks, particularly as they are still recovering from COVID-19. With over 275 million people facing acute food insecurity, I am deeply concerned about the impact of Russia’s war on food prices and supply, particularly on poor populations who spend a larger share of their income on food. The multilateral development banks are already providing financing to strengthen domestic food production, bolster social safety nets, and unlock trade finance. They must also couple their near-term responses with longer-term investments to address the underlying vulnerabilities in food systems. I’ll be convening leaders in this field next week to discuss further potential solutions.

The ultimate outcome for the global economy, of course, depends on the path of the war. Russia could end this unnecessary war, and the near-term impact could be contained.

While many countries have taken a unified stand against Russia’s actions and many companies have quickly and voluntarily severed business relationships with Russia, some countries and companies have not. So let me now say a few words to those countries who are currently sitting on the fence, perhaps seeing an opportunity to gain by preserving their relationship with Russia and backfilling the void left by others. Such motivations are short-sighted. The future of our international order, both for peaceful security and economic prosperity, is at stake. And this is an order that benefits us all. And let’s be clear, the unified coalition of sanctioning countries will not be indifferent to actions that undermine the sanctions we’ve put in place.

The war in Ukraine and sanctions against Russia highlight the pivotal role of China. China has long claimed to hold sacrosanct key international principles—including those enshrined in the U.N. Charter with respect to sovereignty and territorial integrity. Whatever China’s geopolitical aims and strategies, we see no benign interpretation of Russia’s invasion, nor of its consequences for the international order. China cannot expect the global community to respect its appeals to the principles of sovereignty and territorial integrity in the future if does not respect these principles now when it counts.

China has recently affirmed a special relationship with Russia. I fervently hope that China will make something positive of this relationship and help to end this war. Going forward, it will be increasingly difficult to separate economic issues from broader considerations of national interest, including national security. The world’s attitude towards China and its willingness to embrace further economic integration may well be affected by China’s reaction to our call for resolute action on Russia.

The Russian invasion of Ukraine has dramatically demonstrated the need for us to stand together to defend our international order and protect the peace and prosperity that it’s conferred on advanced and developing countries alike. As we do so, it’s worth considering the breadth of unmet global challenges that would benefit from greater cooperation of the kind we have mustered in confronting Russia.

On some issues, like trade and competitiveness, this will involve bringing together partners that are committed to a set of core values and principles. We will also need to modernize our existing institutions—the IMF and the multilateral development banks—so they’re fit for the twenty-first century, where challenges and risks are increasingly global. And finally, we need to build trust and cooperation to improve our ability to provide the global public goods that are needed to address these challenges.

I’ll now present a set of propositions on how to turn some of our problems into opportunities to move forward. First, we need to modernize the multilateral approach we have used to build trade integration. Our objective should be to achieve free but secure trade. We cannot allow countries to use their market position in key raw materials, technologies, or products to have the power to disrupt our economy or exercise unwanted geopolitical leverage. So let’s build on and deepen economic integration and the efficiencies it brings on terms that work better for American workers. And let’s do it with the countries we know we can count on.

Favoring the friend-shoring of supply chains to a large number of trusted countries, so we can continue to securely extend market access, will lower the risks to our economy as well as to our trusted trade partners. We should also consider building a network of plurilateral trade arrangements to incorporate elements of the modern economy that are growing in economic importance, especially digital services. We should harmonize our approaches to protecting the privacy of data. And a modernized trade system will also require the ability to effectively enforce trade policies and practices, both multilateral and bilateral.

Second, we should implement last year’s global tax deal. Some 137 countries representing nearly 95 percent of the world’s GDP have agreed to rewrite the international tax rules to impose a global minimum tax on corporate foreign earnings and to partially reallocate taxing rights from countries where companies are headquartered to those where they sell goods and services. This tax deal is necessary to end the race to the bottom in corporate taxes and to reform profit reallocation rules that, by demanding a physical nexus to a taxing jurisdiction, no longer reflect modern economic realities. By ensuring that profitable corporations pay their fair share and operate on a living—level playing field, the deal will provide governments around the world the resources they need to invest in their people and economies.

Third, we must ensure the IMF has the tools to fulfill its role of financial firefighter in the face of modern, potentially more frequent, global crises. The IMF evolved to assist countries needing domestic policy adjustments to overcome balance-of-payments difficulties. It wasn’t designed to deal with the novelty and breadth of the last two global crises. As a consequence, the economic and financial response to the global financial crisis in 2008/2009 was too timid and short-lived. With inadequate global liquidity, the crisis caused lasting damage. In response to the pandemic, the IMF acted creatively to support poorer countries. Still, those countries with the resources to do so responded forcefully—protecting incomes and profits, preventing debilitating bankruptcy, and rapidly reversing the decline in GDP. And we were less successful in supporting poorer countries, which has led to a divergence in global prospects. We will also need to consider the governance of the institution to ensure that it reflects both the current global economy and also members’ commitments to the IMF’s underlying principles and objectives.

Fourth, let’s revisit our strategies, policies, and institutions to better mobilize capital in support of people in developing countries. We’ve made great efforts to provide funding to support human development, the creation of needed infrastructure, and more recently the attainment of climate objectives. Multilateral development banks, bilateral official donors and creditors, and growing private-sector involvement deserve credit for important achievements. That said, the response to date is just not to the scale that’s needed. Experts put the funding needs in the trillions, and we’ve so far been working in billions. The irony of the situation is that while the world has been awash in savings—so much so that real interest rates have been falling for several decades—we have not been able to find the capital needed for investments in education, health care, and infrastructure. There’s little doubt that there are huge potential returns, both human and eventually financial, in equipping billions of people in developing countries with what they will need to succeed. Going forward, we need to evolve the development finance system, including the World Bank and the regional development banks, to our changing world, in particular to better mobilize private capital and fund global public goods. However, the multilateral development banks alone will never meet the scale of financing needed, so we also need to revisit our strategies for making capital markets work for people in developing countries.

Fifth, we must expedite the global transition to a more secure and cleaner energy future, with more energy access for all. We know we have not yet done enough in terms of mitigation, adaptation, green technology innovation and adoption, and funding for those efforts. The recent IPCC reports confirm that our window of opportunity to leave our planet worthy of our children and our grandchildren is even closer to being permanently shut. We must redouble our efforts to decarbonize our economies, recognizing that countries will use a range of tools—including carbon pricing, regulation, and subsidies—to achieve needed emissions reductions. Because those approaches will have quite different consequences for the costs of production, we will see differing impacts on trade competitiveness. And we’ll need to work together to avoid trade tensions and in time to coordinate and harmonize our approaches.

And finally, sixth, we need to complete work on strengthening the global health architecture to boost pandemic preparedness and response. History teaches us that pandemic risks rise with the interconnectedness of the world. And recent history shows us the incredibly high cost of inadequate preparation. G20 countries are now working through a Joint Health and Finance Task Force to leverage broad country and expert participation to address the current gaps in the international health architecture for pandemic prevention, detection, information sharing, and crisis response. We have also proposed a Financial Intermediary Fund as a vehicle to help fill in the gaps in health system investments at the country, regional, and global level so that we are collectively better able to prepare for and prevent future crises.

As we gather for the IMF and World Bank spring meetings next week, I look forward to working with my partners to address these big issues. At the top of everyone’s minds will be the direct impact and broader spillovers of Russia’s invasion of Ukraine. We will also advance efforts to mobilize vaccine donations and delivery support, further discussions on tackling the climate crisis, and continue to expand our efforts to support low-income countries. Now, some may say that now is not the right time to think big. Indeed, we’re in the middle of Russia’s war in Ukraine, alongside the lingering fight against a global pandemic, and a long list of other initiatives underway. Yet, I see this as the right the time to work to address the gaps in our international financial system that we are witnessing in real time.

Treasury officials began crafting proposals for the IMF, the World Bank, and the post-war international financial architecture in 1941, as World War II raged in Europe. Three years later, in the opening to the Bretton Woods Conference—occurring as the Allied invasion of Normandy was still underway—President Roosevelt said, “It is fitting that even while the war for liberation is at its peak, we should gather to take counsel with one another respecting the shape of the future which we are to win.” As then, we ought not wait for a new normal. We should begin to shape a better future today. Thank you.

RANA FOROOHAR: Secretary Yellen, thank you so much for that. That was a wonderful speech, and a lot, lot here to chew on in twenty minutes. I’ll do my best to—


RANA FOROOHAR:—to try and tease out some of what you’ve said.

In some ways, what you’re calling for is really a new Bretton Woods; you know, that we are in this pivot point, a seventy-year pivot point. The old institutions that were developed during that period—which, it should be said, they were developed to try and tamp down nationalism, populism, knit together capital markets—they’re not quite fitted at this point for this era.

What could the new institutions look like? Are the World Bank, the IMF, the world trading system, are these going to evolve fundamentally from what they are today? And how might that happen?

SECRETARY JANET YELLEN: Well, I think we at Bretton Woods created an excellent set of institutions that have served the world very well in opening up trade and investment. And these developments have really led to more efficient economies, economic growth, and lifted billions of people from poverty. So we need to keep those accomplishments in mind.

But these institutions, while I feel they should play an important role going forward, they need to be modernized to address problems, some of the ones that I mentioned in the speech, that are really challenges that we face today and these institutions were not really designed to address.

So I don’t think we need to invent a completely new financial architecture, but we do need to enable these institutions to address modern-day challenges.

RANA FOROOHAR: Well, speaking about financial architecture, we should talk about sanctions. And as you pointed out, the fact that they were done in conjunction with allies, there was a lot of cooperation, more than many of us suspected could be the case. That shows the power of the US system, the dollar-based system.

On the other hand, where China has landed in all this—as you pointed out, not exactly antagonistic, but certainly not sort of joining these efforts—calls to mind a new kind of bipolarity in the world. Some countries, particular emerging markets, are now concerned—can the dollar reserves be weaponized?

Do you see a bipolar system as the new reality in which the US and its allies are in one campo and maybe China and others are in another camp?

SECRETARY JANET YELLEN: Well, I really hope that we don’t end up with a bipolar system. And I think we need to work very hard and to work with China to try to avert such an outcome. I think to me the big picture is that China has benefited enormously from being part of a global system, a rules-based multilateral system. And this has really promoted China’s economic growth. And we ought to try to preserve the best features of that system. I believe it’s also been beneficial to the United States and our allies.

But real problems have emerged, and we need to work with China to address those problems. China relies in many ways on state-owned enterprises and engages in practices that I think unfairly damage our national-security interests. And I think we’ve all recognized, in the aftermath of the pandemic, that our supply chains, while having become very efficient and excellent at reducing business costs, have not been resilient. And we need to address that as well.

And in some cases, as I mentioned in the speech, I would see that involving friend-shoring, that we have a group of partners we feel comfortable with our geopolitical—we’re not worried about geopolitical issues. We know that we can count on them, rather than take a purely domestic approach. I think we get the benefits of continued efficiencies in production by having a group of partners who work to shore up supply chains and make them more resilient. But I think China needs to take seriously working with us, and it’s not just the United States. Europe and other countries share concerns about some of the practices that China has that negatively impact our national security, human rights concerns. I would like to see us preserve the benefits of deep economic integration with China, not going to a bipolar world, but clearly that’s a danger that we need to address.

You know, I think with respect to the dollar, you know, what countries like Russia are experiencing, you see the power of partnership between the United States and our allies and the importance of the dollar, the euro, as currencies in which transactions take place as a tool to impose sanctions that can be immensely costly. And there are countries that would like to invent a system that freed them of reliance on the dollar, but I think it will be a long time, if ever, before the dollar is replaced as a key reserve currency in the global economy, and that’s fundamentally because of the strengthened role of the US economy, the strength of our financial system, the fact that we have institutions in law that—and deep in liquid financial markets that makes investors all around the world feel safe in relying on the dollar as a store of value and means of exchange, so there will be a desire to avoid sanctions, to replace the dollar, but I don’t think we will likely see that happen.

RANA FOROOHAR: It’s worth saying, too, that the dollar’s over 60 percent of global reserves, so by far the largest percentage. I mean, what you’re getting at, in some ways, is trust: trust in a US-led system, trust in a group of allies. I think this word “friend-shoring” is very interesting. What does friend-shoring look like? How might that change the way global supply chains work?

SECRETARY JANET YELLEN: Well, you know, rather than being highly reliant on countries where we have geopolitical tensions and can’t count on ongoing, reliable supplies, we need to really diversify our group of suppliers. And yes, friend-shoring means—and you’ve seen this in action—that we have a group of countries that have strong adherence to a set of norms and values about how to operate in the global economy and about how to run the global economic system, and we need to deepen our ties with those partners and to work together to make sure that we can supply our needs of critical materials.

RANA FOROOHAR: I would imagine that ESG regulations would create a tailwind for that too—yes?—with new standards around environment, labor. You mentioned labor and the importance of modernizing trade and getting it right for labor, which of course, you know, over the last forty years has been one of the things that a lot of folks have complained about in rich countries, you know, that labor got the short end of the stick. What proposals might we see? How might that be prevented in the future?

SECRETARY JANET YELLEN: So I don’t have a detailed roadmap to give you about how we should address these issues, but I think one thing that you may see and that I think would be desirable is for groups of like-minded countries that wish to adopt high standards with respect to labor, the environment, privacy protections, digital—you know, treatment of digital business and services that these countries might band together and form partnerships, you know, that can be open partnerships that other countries can join, participate in, so that it’s not a closed grouping; it’s a plurilateral but open grouping that would encourage other countries to join. And so I think that type of development is something—you know, United States is certainly interested in that. And I think our partners will be as well.

RANA FOROOHAR: Let me—before we move on to food and fuel and inflation, I want to ask you just one more question about cooperation. The US-EU relationship is crucial. You know, we’ve seen the power of that in regards to sanctions with the war in Ukraine, with tax, which is an OECD deal which you, of course, spearheaded. What other opportunities do you see right now for the US and Europe to come together? I mean, could there be some kind of agreement on how to bridge the current energy crisis, and yet push forward to clean tech? Could there be agreements around digital currency development, which is something that you’ve said has value. And the US is, of course, looking at that.

SECRETARY JANET YELLEN: I think all of those things. I think that Europe is very heavily focused, because of the Russia-Ukraine situation, on the need for more secure energy supplies. And the United States and Canada and other countries in our partnership certainly want to work with Europe to free Europe of its dependence on Russian oil and to make energy supplies more secure. Certainly, we’ve cooperated on a wide range of global issues where we have shared values. Climate change is certainly one of them. We have different approaches to climate change in the United States and Europe, and we’ll have to work together to figure out how to coordinate our interactions so that we don’t end up dealing with trade tensions related to environmental policy.

But without question, we’ll work closely with our European partners. And we’re doing so in the international institutions to promote greater climate finance, to make sure that resources flow to developing countries, to make sure that we are better prepared to address future pandemics. A cooperation is really extensive. And I think a benefit in a way, or at least one positive outcome of what’s happening in Russia and Ukraine, is the deepening partnership that you’re seeing between the United States and Europe on this wide array of issues.

RANA FOROOHAR: Yeah, opportunity in crisis. Well, let’s talk a little bit about food and fuel inflation—a very, very anxiety-provoking combination. The last time we saw this we had riots in many countries. We had, you know, the situation that led to the Arab Spring. What is your worry right now about the combination of food and fuel inflation leading to either recession or potentially political unrest?

SECRETARY JANET YELLEN: Well, we’re certainly seeing high inflation. And not just in the United States, around the world. It partly reflects the pandemic and supply chain issues that developed in connection with the pandemic, this shift in demand towards goods. But now we’re on top of that and the fact that energy supplies are being reduced and energy prices have risen, that Ukraine and Russia provide more than 20 percent of global food exports, we’re seeing skyrocketing wheat, corn prices, energy. Also of various metals—nickel, palladium we rely on that can—goes into catalytic converters, can end up raising the prices of cars. A wide range of commodities.

And, you know, that’s something that not only boosts inflation; it also diminishes demand as households have less to spend, having to meet the cost of more expensive putting food on the table and heating one’s home. So I think particularly in Europe, which is more vulnerable, I worry more about recession prospects. But it should be—it is likely to be a hit to global growth. And for all those countries that already suffer from food insecurity, this is just a tremendous concern. I think I mentioned 275 million people in the speech who are vulnerable in the event that food prices rise. And so this will be an urgent concern for us next week to try to think about how we can stave off starvation around the world. It’s, really, a grave concern.

RANA FOROOHAR: Yeah. No, and the percentage of income that has to go to those basics is overwhelming in those countries.

Let me ask you—I mean, you’re in this unique position, having held all the top jobs in your field. If you can kind of put on both your Treasury hat and your Fed—former Fed chair hat. We’re at a very delicate, to put it mildly, moment in terms of, all right, you’ve got rising food and fuel inflation, even in a rich country like the US, that’s hitting working people hard.

You’re starting to see, anecdotally, signs that that folks are scaling back on some nonessential purchases. That could have a knock-on effect into the corporate world in areas, you know, from industrials to tech. Rates are looking to rise. That’s a tricky combination.

How do you see the next year or two playing out, given all that?

SECRETARY JANET YELLEN: Well, as you say, it is a tricky situation because we’ve had high inflation over the last year somewhat more. We, in the United States, have a very strong economy and a very strong labor market. By many metrics, labor markets are as tight right now in the United States as they really ever have been in my lifetime, including the end of the 1960s when the unemployment rate, I believe, drifted down below 3 percent.

So we’re seeing strong, strong wage pressures coming out of a strong labor market, enormous job openings. But on top of that, inflation, on top of that, coming from supply shocks from the pandemic, we now have to worry about bottlenecks from pandemic in China where we’re seeing, you know, Shanghai put under lockdown and, really, you know, the potential for further supply chain pressures and, of course, food and energy.

So the Fed is, clearly, on a path to try to address that. It’s their job to bring inflation down. I won’t comment on the strategy that they’re going to use. That’s their independent choice of what they think is right.

But, you know, they have a dual mandate. They will try to maintain strong labor markets while bringing inflation down but—and it has been done in the past. It’s not an impossible combination. But it will require skill and also good luck, and I know that that’s what they will try to accomplish.

RANA FOROOHAR: I think we have time for maybe one more question or so. How are we doing on time?

Let me just, finally, ask you, you’ve set forward a pretty ambitious agenda for a changing world, you know, possibly, a post neoliberal world, certainly, a more contentious world in some ways. But there’s also a lot of opportunity to rebuild old relationships, to create new frameworks, which you’ve already done with tax, a huge accomplishment—


RANA FOROOHAR:—in digital regulation, in trade regulation to create a new world, as the Bretton Woods thinkers did themselves. What would—going into next week’s meetings—it’s only a week—but what would success look like for you? What would you like to come out of those meetings and be able to say?

SECRETARY JANET YELLEN: Well, I would like to see countries embrace the need for cooperation and take this moment as a wakeup call for addressing a set of challenges that have gotten us to a very critical juncture for the global economy, and to take from our success in sanctioning Russia to understand the power of working together, and we have worked together.

We’ve really strengthened multilateral ties and especially our ties with our European and G7 partners and I think that that has had a payoff, and these are very difficult challenges that we face. But I think strengthening our alliances, working together to do these, I hope that people are able during the week to feel the power of cooperation and to take it further.

RANA FOROOHAR: Well, that’s a good, optimistic note to end on. Secretary, thank you so much for your speech, for your comments. Thanks to the Atlantic Council and for everyone being here today.

SECRETARY JANET YELLEN: Thanks so much, Rana. Thank you, Fred.

RANA FOROOHAR: I’m going to turn it over to Josh now.

JOSH LIPSKY: Well, thank you, Rana, for moderating that wide-ranging and fascinating conversation in twenty minutes.

Madam Secretary, it is an honor for us at the Atlantic Council to have heard from you today and to host this special Atlantic Council Front Page. We look forward to continuing to work with you and your team in the days ahead.

Now, this morning you shared with us the ways in which the West is punishing Putin’s economy for his brutal and ruthless invasion of Ukraine. And you made it clear every country has a choice before them, and I think that was an important message. And you also asked us to think beyond today. You explained how the United States, in coordination with partners and allies, can build a stronger global economy in the years ahead. And you reminded us of what is possible when international cooperation is directed at addressing both our immediate crises and our long-term challenges.

These challenges, from competition with China to the pandemic to addressing climate change, will define the decade. And we are committed at the Atlantic Council to ensuring the right solutions come forward. The issues you highlighted today will continue to animate the work of the GeoEconomics Center.

This week, we launched our Bretton Woods 2.0 Initiative in line with many of the messages you delivered this morning. The goal is to help reimagine international finance for a new era.

Next week, we will publish our updated version of our Global Sanctions Dashboard from our Economic Statecraft Initiative and we will welcome finance ministers from around the world during the IMF-World Bank spring meetings.

Two weeks from today, the GeoEconomics Center will host a flagship conference in London to explore the ways in which the United Kingdom and the United States, the primary architects of the Bretton Woods system, can deepen their economic partnership.

And next month, we will launch major new research on digital currencies.

The GeoEconomics Center is just part of the impactful work happening across fifteen programs and centers at the Atlantic Council. So on behalf of all of my colleagues, thank you, Madam Secretary, for being here today and sharing your insights. I want to thank everyone from the Atlantic Council and the Treasury Department for their collaboration in making today possible. And I want to thank our guests here in Washington as well as those watching around the world for joining us this morning. We hope you will stay engaged with us at the Atlantic Council.

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Image: US Treasury Secretary Janet L. Yellen delivers a speech at the Atlantic Council on Wednesday, April 13, 2022. (Photo by Yassine El Mansouri.)