Former Fed Chair Janet Yellen says Trump doesn't understand the Federal Reserve or economic policy

Trump Yellen wide

  • Former Federal Reserve Chair Janet Yellen told
    Marketplace
    that President Donald Trump doesn’t understand
    economic policy.
  • Yellen, now at the Brookings Institution, also said Trump’s
    focus on the US-China trade deficit is misguided.
  • The former Fed Chair said Trump’s attacks on current Fed
    Chairman Jerome Powell are detrimental to the public’s confidence
    in the central bank.

Former Federal Reserve Chair Janet Yellen gave a harsh critique
of President Donald Trump’s economic knowledge in an interview
published Monday.

Yellen, who left the Fed in 2018, told
Marketplace’s Kai Ryssdal
that the president doesn’t understand
the basics of the Fed or macroeconomics.

“Do you think the president has a grasp of macroeconomic
policy?” Ryssdal asked.

Yellen’s reply was short: “No, I do not.”

Yellen pointed to two topics, the Fed’s dual mandate and the
US-China trade relationship, as examples of where Trump falls
short.

The former Fed Chair said Trump did not seem to understand the
Fed’s dual mandate — the two key goals that the central bank is
trying to achieve — of price stability and maximum
employment.

“Well, 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 told
Marketplace.

Read more:
Janet Yellen calls Trump’s attacks on the Fed a ‘worrisome’
undermining of economic stability

Yellen, who is now a distinguished fellow in residence at the
Brookings Institution, also criticized Trump’s focus on the
bilateral trade deficit with China. The president has made
reducing the US-China trade imbalance
a key goal for the
ongoing trade negotiations.

“And when I continually hear focus by the president and some of
his advisers on remedying bilateral trade deficits with other trade
partners, I think almost any economist would tell you that there’s
no real meaning to bilateral trade deficits, and it’s not an
appropriate objective of policy,” Yellen told Ryssdal.

Trump passed over Yellen for a reappointment in 2018, instead
tapping Jerome Powell to lead the central bank. According to a

report from the Washington Post
,
one of the reasons for Trump’s decision
to move away from
Yellen was because the 5-foot-3-inch economist was not tall
enough.

Read more:
Federal Reserve Chairman Jerome Powell just brushed off months of
attacks from Trump

Yellen has previously criticized the president’s public attacks
on the Fed and Powell’s decision to increase interest rates. The
former Chair raised those issues again in the interview.

“President Trump’s comments about Chair Powell and about the Fed
do concern me,” she said, “because if that becomes concerted, I
think it does have the impact — especially if conditions in the
US for any reason were to deteriorate — it could undermine
confidence in the Fed. And I think that that would be a bad
thing.”

Read
the full story from Marketplace »

SEE ALSO: Trump
announces delay of tariffs on Chinese goods due to ‘substantial
progress’ in talks to end US-China trade war


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Source: FS – All – Economy – News
Former Fed Chair Janet Yellen says Trump doesn't understand the Federal Reserve or economic policy