Trump claims Fed Chair Yellen does White House’s bidding
US Republican presidential nominee Donald Trump said Federal Reserve Chair Janet Yellen was suppressing interest rates to suit the White House’s political agenda.
Speaking to CNBC, Mr Trump reiterated a charge he has made before that Ms Yellen was improperly maintaining a low federal funds rate to bolster President Barack Obama’s popularity.
“It’s staying at zero because she’s obviously political and doing what Obama wants her to do. I know that’s not supposed to be the way it is but that’s why it’s low,” Mr Trump said.
He alleged that the Fed was leaving the painful task of raising rates to the next president.
“The interest rates are kept down by President Obama. I have no doubt that’s the reason they are being kept down,” he said.
By statute, the Fed is an independent body intended to be shielded from political pressure and whose operations are not funded by the US Congress.
Mr Trump also said that low rates were creating a “false market,” adding that stock markets were likely to drop sharply once rates eventually do go up. He said the long period of low rates had most hurt retirement investors who had expected to draw on savings interest.
“The next president, let him or her raise interest rates and watch what happens to the stock market,” Mr Trump said.
“The people that were hurt the worst are people that saved their money all their lives and thought they were going to live off their interest and those people are getting just absolutely creamed.”
Mr Trump’s remarks come after US equity markets lost more than 2 percent on September 9 on fears the Fed will raise rates this month.
The US national debt stood at US$7.6 trillion when Mr Obama took office with a sinking economy in January 2009. It now stands at $19.5 trillion. The total percentage change in national debt under Mr Obama compared to other administrations has been comparatively modest, however. –
Janet Yellen is accused of suppressing interest rates.