It’s impossible to know how President Donald Trump truly feels about Federal Reserve Chair Janet Yellen because, as he does so often, he has both bashed and praised her depending on his whim.
During his campaign, Trump said that Yellen was doing a good job but that he would not renominate her because she is a Democrat, a clear violation of the basic principle of central-bank independence from politics.
Later, when the campaign was heating up, Trump accused Yellen of keeping interest rates low to help President Barack Obama.
Since taking office, Trump has reverted to liking her, saying he might keep her in the job when her term expires early next year after all. “I do like a low-interest-rate policy, I must be honest with you,” Trump said.
After Trump’s incendiary firing this week of James Comey, who as FBI director was leading the bureau’s investigation into Trump and his associates’ ties to Russia, a smart market analyst asked me a question over lunch that I did not have the answer to: Could he do the same thing to Yellen if, say, she decided to keep raising interest rates and Trump wasn’t happy with the policy?
So I contacted a few smart folks with deep knowledge of the Federal Reserve, and they pointed me to the specific language showing that, yes, the president does have the power to fire Yellen, despite the central bank’s ostensible independence.
Read the relevant statute below:
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May 12, 2017 at 08:48PM
from Pedro Nicolaci da Costa
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