Donald Trump accused Federal Reserve Chairwoman Janet Yellen of keeping interest rates low to benefit President Obama, suggesting Tuesday that the central bank head is politically compromised.
“Janet Yellen is highly political, and she’s not raising rates for a very specific reason – because Obama told her not to,” the Republican presidential candidate said at a press conference in New York. “Because he wants to be out playing golf in a year from now … he doesn’t want to see a bubble burst during his administration.”
U.S. financial markets are in a bubble, Trump asserted, and the bubble will collapse when the Fed raises rates. The central bank has targeted short-term interest rates near zero since the financial crisis, and is expected to raise that target in December or early next year.
“Janet Yellen should have raised rates,” Trump said. “She’s not doing it because the Obama administration and the president doesn’t want her to.”
The White House denied placing any pressure on the Federal Reserve Tuesday afternoon.
“This administration goes to great lengths to ensure that the Federal Reserve can make monetary policy decisions that are focused solely on the best interests of the country and our economy, and to prevent those decisions from being influenced or even tainted by more narrow political considerations,” said White House press secretary Josh Earnest during a press briefing.
Earnest also cast doubt on Trump’s credibility, noting that the real estate magnate has put several companies through bankruptcy.
Although other Republican candidates have been critical of the Fed’s efforts to stimulate the economy using extraordinary measures, Trump is the first to directly accuse Yellen of conducting monetary policy for Obama’s political benefit.
Yellen is scheduled to testify before a House panel Wednesday, where she will face Republicans skeptical of her management of the Fed.
