Fed chief Janet Yellen will testify before the U.S. Senate Banking Committee on Tuesday. She is likely to receive a frosty reception from the Republicans emboldened by President Trump’s stinging remarks about the Federal Reserve and its current chair. Take a look…
“Janet Yellen is highly political”
November 3, 2015
The public feud began in November 2015 when then-Republican nominee Donald Trump accused the Fed of doing President Obama’s bidding by keeping interest rates low. Speaking at a news conference at Trump Tower, he said Obama “wants to be out playing golf in a year from now and he wants to be doing other things and he doesn't want to see a big bubble burst during his administration.”
“When her time is up, I would most likely replace her”
May 5, 2016
Trump said he would probably replace Janet Yellen when her four-year term expires (which is in February 2018). In an interview with CNBC, he said “people that I know have high regard for her, but she is not a Republican.” However, there was some common ground. Trump called himself a “low interest rate person,” saying a strong dollar would cause “major problems” for the U.S. economy.
The Fed has created a “very false economy”
September 5, 2016
Four months later, Trump does a U-turn and says interest rates “are going to have to change”. Speaking on the campaign trail, he claimed the Fed was “keeping the rates down so that everything else doesn't go down.” The billionaire also called the stock market “artificial.”
“She’s doing what Obama wants her to do”
September 12, 2016
Trump again questioned the Fed’s independence, saying the central bank is propping up the stock market to keep Obama happy. In an interview with CNBC, Trump said “any increase [in interest rates] at all will be a very, very small increase because they want to keep the market up so Obama goes out and let the new guy … raise interest rates … and watch what happens in the stock market.”
Yellen should be “ashamed of herself”
September 12, 2016
Then it gets super personal! In the same interview, Trump said Yellen should be “ashamed” of what she’s doing to the country. He said American savers are feeling the pain of low interest rates: “they saved their money [and] they cut down on their mortgages, … and now they're practically getting zero interest on the money.”
Of course, President Trump isn’t the only Republican who has criticised the Fed. Long-time critic Kentucky senator Rand Paul has been calling for an audit of the Federal Reserve for many, many years. Meanwhile, Texas senator Ted Cruz has blamed the central bank for causing the Great Recession.
Yellen’s testimony begins at 10:00 a.m. ET on February 14, 2017.