US Republican presidential nominee Donald Trump said Monday that Federal Reserve Chair Janet Yellen was suppressing interest rates to suit the White House’s political agenda. Economists and commentators were quick to dismiss his…
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Speaking to CNBC, Trump reiterated a charge he has made before that Yellen was improperly maintaining a low federal funds rate to bolster President Barack Obama’s popularity.
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But the Fed needs to make a move because it’s creating a “false market because money is essentially free”, he said. I don’t think it’s going to happen very much because [Obama] wants to go out. He wants to play golf for the rest of this life.
Minneapolis Federal Reserve President Neel Kashkari responded in a later interview on CNBC by denying that politics had influence on Fed policymaking.
With the Federal Reserve powerless to do much more than it already is, the best route to faster US economic growth is through non-monetary policy approaches such as immigration and tax reform, a top Fed official argued on Monday. “The ones who did it right – they saved their money [and] they cut down on their mortgages, . and now they’re practically getting zero interest on the money”.
The Fed meets next week to decide whether to raise rates from their current range of 0.25% to 0.5%. But he said it is “dangerous” and “not healthy” for Trump to question the Fed’s integrity. “I have no doubt that that’s the reason they are being kept down”. He said at the time that raising rates would be a “disaster” and he described himself as a “low-interest-rate person”.
“If I refinance something, I can get money for nearly nothing”, Trump said.
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Trump’s remarks come after U.S. equity markets lost more than two percent on Friday on fears the Fed will raise rates as soon as this month.
