Trump doesn't understand economic policy, fmr. Fed Chair Yellen says
Former chair of the Federal Reserve, Janet Yellen, said she doesn’t think President Trump understands economic policy, as the U.S. president remains highly critical of the central bank and its policies.
When asked during a radio interview whether she thought the president had a “grasp of macroeconomic policy,” Yellen responded that she did 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 said during the interview with “Marketplace.”
The former Fed chair added that some comments Trump has made – including about the Fed having an exchange rate objective to support his trade policies – show a “lack of understanding of the impact of the Fed on the economy.”
Further Yellen said his criticisms “concern” her because they could undermine confidence in the central bank.
Yellen, whose term ended about one year ago, was not reappointed by Trump. She was succeeded by Jerome Powell, who has found himself in the president’s crosshairs as well.
Trump has recently lashed out at Powell and the central bank for its interest rate normalization policy, telling Reuters in December that Powell was being “too aggressive” with interest rate hikes. In November, he told The Washington Post he was not happy with his selection of Powell, and that the Fed was a bigger problem than China. During an interview with FOX Business in October, the president said his “biggest threat” was the Fed.
Reports even surfaced that he was considering firing Powell.
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Powell met with Trump over dinner at the White House earlier this month, where the former is said to have harped on the importance of economic data when establishing monetary policy.
The central bank hiked the benchmark interest rate four times last year. Officials have said they will maintain a "patient" approach with regards to increases in 2019.