Former Federal Reserve Chair Janet Yellen said Monday that Donald Trump lacks a basic understanding of the role and goals of the Federal Reserve — and of how the Fed helps the economy, CNBC is reporting.
Yellen — who during her time on the job was all but silent about her boss, even though Trump himself had plenty to say about her — is now speaking out again. Now out of her old job, Yellen is speaking freely about Trump, and what she’s saying is far from charitable. In an interview for American Public Media’s Marketwatch, she made this point very clear.
For example, when asked if she believes Trump has a “grasp of economic policy,” Yellen directly answered, “No I do not.”
“I doubt that he would even be able to say that the Fed’s goals are maximum employment and price stability, which is the goals that Congress have assigned to the Fed.”
Yellen went further to say that Trump had hoped the Fed would base its exchange-rate moves on Trump’s trade plans and his eagerness to address the U.S.’s trade imbalance. These hopes came in spite of the fact that the Federal Reserve traditionally acts independently and without interference from the Executive Branch, even though the president appoints its chairpersons.
“I think comments like that shows a lack of understanding of the impact of the Fed on the economy, and appropriate policy goals.”
Elsewhere in the interview, Yellen points to Trump’s tax plan and “discretionary spending” as possibly leading, in the near future, to the U.S. and global economies starting to slow down. She also criticized Trump’s tariffs and related trade policies.
“The tax plan, and there were big spending increases as well, discretionary spending for defense and nondefense. That impetus is beginning to die out and could, you know, could turn to restrictive in another year.”
Yellen was appointed to her post as Chair of the Federal Reserve by Barack Obama in 2014, a four-year position which would extend into the Trump administration.
Trump was, at least at first, openly critical of Yellen — often claiming that her actions in her role as Fed chairperson, including keeping interest rates “artificially” low, were intended to make her appointer, Barack Obama, look good at his expense. He later softened his stance towards her, at least publicly. However, when it came time to renew her for her second four-year appointment, Trump declined, instead appointing Ben Bernanke. That move made Yellen the first Fed chair not appointed to a second term since the Carter administration.