She Was Blamed for the “Biggest Treasury Blunder Ever,” So Why Did a $2 Trillion Firm Just Hire Her?

Janet Yellen, the 78-year-old former Treasury Secretary, is back in the spotlight… and surprisingly, she’s not here to issue more short-term debt. This time, she’s stepping into the bond world’s big leagues as the newest member of PIMCO’s elite global advisory board.

If you’ve never heard of PIMCO, that just means you’re under 65 and don’t get giddy over interest rate swaps. PIMCO is a $2 trillion fixed-income juggernaut… basically the Berkshire Hathaway of bonds. It once housed Bill Gross, the self-declared “Bond King,” before he retired and promptly got into a neighborhood war over fart smells and blasting classical music at 7 a.m (seriously, you should look it up).

If PIMCO’s legendary status has you wondering about performance… don’t expect fireworks. Their flagship Total Return Fund has averaged around 3–4% annually over the past five years. (Yeah, I know… not exactly mooning like Nvidia. But in bond land, that’s a standing ovation.) Again, bonds are designed to keep your portfolio calm when the S&P throws a fit… and PIMCO’s job is to make sure you sleep at night while all your tech friends have nightmares about Tesla falling below $200.

Now, Yellen joins a seriously stacked squad that includes former UK Prime Minister Gordon Brown (he’s now board chair), economist Raghuram Rajan (former Reserve Bank of India head), ex-White House Chief of Staff Joshua Bolten, and national security veteran Michèle Flournoy. Let’s just say, if you scored an invite to one of their business dinners, expect the conversation to bounce between interest rate differentials, fiscal policy frameworks, and geopolitical risk assessments. (So yeah, probably not the crowd to bring up your Severance conspiracies.) 

If you remember right, Billionaire investor Stanley Druckenmiller recently torched Yellen’s Treasury legacy, calling her failure to issue long-term debt during 2020’s near-zero interest rate era “the biggest blunder in Treasury history.” (AKA: while you and every other American were locking in 30-year mortgages at 2.5%, Yellen was issuing 2-year notes at 0.15% like we weren’t about to walk into the inflation blender.)

“She could’ve issued 30-year bonds at 1.8%,” Druckenmiller said. “Instead, she acted like the U.S. government was running a payday loan operation.” (His words, not mine… though he’s not wrong.)

Look forward to now, and the same person who helped balloon the debt servicing bill is now advising the Mount Olympus of bond investing. (That’s like hiring the guy who designed the OceanGate Titan sub to lead your next deep-sea expedition.)

But to be fair, Yellen isn’t some rookie off the bench. She was the first woman to chair the Fed, the first to run the Treasury, taught economics at Harvard and Berkeley, and even bagged $180K for a speaking gig at PIMCO back in 2019. (Nice little warm-up lap before joining the board.)

Also, let’s not pretend PIMCO doesn’t know what they’re doing. They don’t bring people on for the LinkedIn clout. Yellen still has deep knowledge of monetary policy and how the Fed machine ticks. And with U.S. interest payments projected to top $640 billion this year (and potentially hit 7% of GDP by 2043) they’re going to need every ounce of insight they can get.

P.S. Just when you thought our beloved congressmen couldn’t get any greasier, one Republican lawmaker decided to YOLO $175k into a stock… right before a major FDIC announcement hit. Lucky timing? Insider edge? You be the judge. We broke it all down inside our recent Stocks.News premium article… click here to check it out ASAP.

Stock.News does not have positions in companies mentioned.