Federal Reserve chair Janet Yellen said she’s not going anywhere, despite Trump’s heavy criticism of her during the campaign. He went as far as to say she should be “ashamed of herself.”
“I’m not going to offer the incoming president advice about how to conduct himself,” Yellen said Wednesday at a press conference after the Fed announced it was hiking interest rates.
Yellen vowed to stay on as Fed chair until her term ends in February 2018. Trump has made it clear he plans to appoint someone new — a Republican — after she leaves.
“I do intend to serve out my 4-year term,” she said. “I’m a strong believer in the independence of the Fed.”
The stock market has surged since Trump was elected president. Investors and CEOs believe Trump will be more “pro-business” by slashing taxes and regulations and spending more money on infrastructure.
But Yellen isn’t ready to endorse Trumponomics as great for the economy.
“It’s too early to know how these policies will unfold,” she said Wednesday.
Fed not predicting big growth spurt
While many Wall Street economists have bumped up their expectations for hiring and growth after Trump was elected, the Fed barely changed its projections. Fed members went from saying the U.S. economy will grow 2% in 2017 to 2.1%. (Trump promises growth of 4%).
When pushed, Yellen questioned whether Trump’s proposed $1 trillion infrastructure spending plan is even necessary.
“I would say at this point that fiscal policy is not obviously needed to provide stimulus to help us get back to full employment,” she said, although she added that she wants to be clear she is not giving policy advice to Congress or the president-elect.
Yellen wants to revisit Dodd-Frank
Trump has made many contradictory remarks about Yellen and whether he thinks the Fed should raise interest rates now. He says he’s “not an enemy” of Yellen’s. But he’s still been mostly critical of her and the Fed for keeping rates almost at 0% for so long.
“She’s keeping [rates] artificially low to get Obama retired. Watch what is going to happen afterwards. It is a very serious problem. And I think it is very political,” he said on CNBC in September.
The Fed and the White House have had tiffs in the past. President George H.W. Bush blames then-Fed chair Alan Greenspan for costing him a re-election.
But Yellen did give one seeming thumbs up to Trump this week. She appeared to agree with him that some regulations have gone too far, especially Dodd-Frank, the legislation enacted after the financial crisis to rein in
Wall Street.
“It’s important to look for ways to relieve the regulatory burden on community banks and smaller institutions,” she said.
Trump has yet to tweet about the rate hike. At the moment, the Fed is predicting three more rates hikes in 2017, but that could change rapidly if Trump and Congress take action on taxes and spending.
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