In 1978, Nancy Teeters became the first woman to serve on the Fed's influential board of governors, having been nominated by President Jimmy Carter. At the time, Sen. William Proxmire, the Wisconsin Democrat who headed the Senate Banking Committee, said it was a "disgrace" that the appointment took so long.
Until Teeters, the Fed had gone the first 65 years of its history without a woman on its board. There have since been seven other female governors, and two of those — Yellen as chair and Sarah Bloom Raskin — are currently serving.
Teeters had already established an illustrious career in public service when she joined the central bank. She began as a staff economist at the Fed in the late 1950s and worked there for nearly a decade, with a short stint at the White House's Council of Economic Advisers, before moving to what is now the Office of Management and Budget. She also worked on Capitol Hill as the chief economist for the House budget committee.
During her confirmation hearing, then-Indiana senator Birch Bayh cited her appointment as proof that women were ready to move into higher echelons of power.
"I think she's a good example of the fact that there are a number of women in this country who have the credentials to do the job; they just happen to be women as well," he said. "She can serve as a shining example to this administration and others that there are other people out there with her qualifications to be used in other places as well."
Teeters stood out at the Fed not just because of her gender. She was among the few members of the Fed's policy-setting committee who publicly opposed chairman Paul Volcker's aggressive moves to curb skyrocketing inflation by hiking interest rates. Volcker eventually helped tame inflation, but the unemployment rate spiked to more than 10 percent as a result. Teeters was not pleased.
Longtime economics reporter William Greider recounted this interview with Teeters in his 1987 book, "Secrets of the Temple: How the Federal Reserve Runs the Country":
"I gave the [Federal Open Market Committee] a lecture," Teeters told me. "I told them, 'You are pulling the financial fabric of this country so tight that it's going to rip. You should understand that once you tear a piece of fabric, it's very difficult, almost impossible, to put it back together again.'" The metaphor, she pointed out to me, was one only a woman might use. "None of these guys has ever sewn anything in his life," Teeters said.
Teeters stepped down from the Fed in 1984 to join IBM. Her vacancy was filled by another woman, Martha Seger, and established a precedent for women serving on the board.
In a 1979 Washington Post column, economics columnist Hobart Rowen noted the organizational change that Teeters seemed poised to usher in for the Fed. She "brings not only a fresh burst of life and enthusiasm to that stolid institution," he wrote, "but immeasurably broadens the board's perspectives."