Trump Says Fed’s Low Interest-Rate Policy Stems From Yellen’s Political Interests

With all due respect to Donald Trump and Hillary Clinton, investors are more concerned about what Federal Reserve chair Janet Yellen will do next with interest rates than who will succeed Barack Obama as president.

“Language from central bankers in the USA has been drifting ever so slightly in the direction of raising interest rates”, said Richard Dekaser, corporate economist for Wells Fargo & Co.

Trump also expressed concern if interest rates were to return to the level of the 1970s, saying that it would hurt businesses and Americans who have taken on debt assuming interest rates would stay low.

“She’s obviously political and doing what Obama wants her to do, and I know that’s not supposed to be the way it is”, Trump said. “The interest rates are kept down by President Obama, I have no doubt that that’s the reason that they are being kept down”. Raising rates makes saving more attractive and helps rein in an overheating economy.

Kristian Rouz – GOP presidential nominee Donald Trump made a series of remarks on Monday regarding the Federal Reserve and its controversial monetary policies; base interest rates have been consistently kept low despite mounting evidence that this monetary environment has produced unhealthy developments in the economy.

“Politics simply does not come up”, he said. In May, Trump said, “She is a low interest rate person, she has always been a low interest rate person, and I must be honest – I am a low interest rate person”.

Regardless of his intentions, Trump’s case that interest rates would be higher if not for political interference is weak on substance.

“The best thing we have going for us is that interest rates are so low”, Trump said. And Trump told CNBC in May that a rate hike could cause a “major problem”, particularly if the US dollar strengthened considerably. But what makes this whole thing even better is that Trump continues to hammer Janet Yellen on her integrity while refusing to distance himself from a despotic ruler in Russian Federation. Four months ago, the Republican presidential candidate told The Wall Street Journal that he had “great respect” for Yellen. “I did a lot of calling”, he reminded CNBC’s Joe Kernen. Though he noted that she is a Democrat and unlikely to be reappointed by him, he suggested that he supported her leadership.

Speaking to CNBC is May, Trump said, “Right now I am for low interest rates, and I think we keep them low”.

But on Monday, he was on the attack.

But in May, Trump said rates needed to stay low to keep the value of the dollar from getting too high and hurting USA exports. “It is a very serious problem … and to a certain extent, I think she should be ashamed of herself”.

Bernanke slashed rates to near zero in the wake of the 2008 financial crisis – the last days of Bush’s presidency. Since then, rates have barely budged and the central bank has pumped trillions of dollars into the recovery in a bid to boost growth. Despite a big dip in the past few days, the stock market has generally been hovering around new heights. Though hiring is strong and the unemployment rate is half of its peak following the downturn, the gains have been uneven and broader economic growth remains disappointing.

But government, and the Fed, should be wary of policy change that poses too much potential for harm, he argued.

“The words “ashamed of” are not appropriate”, said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics and a former economist at the Fed. “I think it’s very political”.

He said as soon as interest rates go up, the stock market is going to go “way down – most likely or possibly”.

Democratic nominee Hillary Clinton has been relatively quiet about Fed. “Because you have no choice”, he said.