Yellen says Trump does not have an understanding of macroeconomic policy

Former US Federal Reserve Chairman Janet Yellen accuses President Donald Trump of the macroeconomics and mission misdirection of the central bank, according to an interview with Marketplace released Monday.

"Do you think the president has knowledge of macroeconomic policy?" Marketplace Raisdal asked Yellen.

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"No, I do not," she replied.

Trump, who has not offered Yellen a second term as head of the Fed, has repeatedly protested against the central bank for raising interest rates, reprimanding critics who say the President should respect the independence of the Fed. Trump also attacked US trade partnerships as unfair and fought a tariff war against China, to the economic detriment of some of his strongest advocates of farming and manufacturing communities.

Yellen said that although the country's economy is generally healthy, she worries that Trump misunderstands basic macroeconomics or even what Congress has mandated to the Federal Reserve.

"I doubt that he can even say that the Fed's goals are maximum employment and price stability, goals assigned by Congress to the Fed," said Yellen, replaced by Jerome Powell year-round last on the Marketplace. interview. "He commented on the fact that the Fed had an exchange rate target in order to support its commercial projects, or possibly target the US trade balance." And, you know, I think such comments show a lack of understanding of the Fed's impact on the economy and the appropriate policy objectives. "

In December, Powell raised rates, prompting rumors that the president could overthrow another Fed president, contrary to Trump's insistence. At the time, Trump had expressed remorse for Powell's appointment, which reflected the priority he placed on the loyalty of his entourage.

Yellen said she feared that these public clashes would reduce confidence in the Federal Reserve if they persisted, but she does not believe that Trump's comments in December had a drastically negative impact.

"President Trump's comments on President Powell and the Fed are worrying, because if it worked out, I think it would have an impact, especially if the situation in the US deteriorated for whatever reason," he said. could undermine trust in the Fed, and I think it would be a bad thing, "she said.