Donald Trump says that he likes low interest rates, but as president he would look to replace Federal Reserve Chair Janet Yellen.
“I think she’s done a serviceable job,” Trump tells Fortune magazine
in an interview that will be published this week. “I don’t want to comment on reappointment, but I would be more inclined to put other people in.”
President Barack Obama appointed Yellen to lead the central bank in 2013, and she succeeded prior chairman Ben S. Bernanke the following year. Trained as an economics professor, Yellen also was chair President Bill Clinton’s Council of Economic Advisers and led the Federal Reserve Bank of San Francisco from 2004 to 2010.
Trump, who is leading the Republican race for the White House, didn’t tell the magazine whom he wants to lead the Fed. In the past, he has supported efforts to audit the central bank
in an effort to make its decision-making more transparent and accountable to voters.
Yellen and Bernanke have pushed back
on the idea of an audit, arguing that the central bank needs to be protected from Congressional pressure in its decisions on setting monetary policy. Fed critics such as former Republican Congressman Ron Paul says the central bank has too much power and has been instrumental
in creating massive asset bubbles that eventually collapse and trigger painful recessions.
Trump tells Fortune that he favors low interest rates
to support a weakened U.S. economy. Earlier this year, he predicted “a very massive recession”
would ensue after a bubble in the stock market collapsed.
“The best thing we have going for us is that interest rates are so low,” Trump tells Fortune. “People think the Fed should be raising interest rates. If rates are 3 percent or 4 percent or whatever, you start adding that kind of number to an already reasonably crippled economy in terms of what we produce, that number is a very scary number.”
Trump says he would like to take advantage of lower interest rates in order to refinance the debt and boost spending on the military and infrastructure, according to Fortune.
“The problem with low interest rates is that it’s unfair that people who’ve saved every penny, paid off mortgages, and everything they were supposed to do and they were going to retire with their beautiful nest egg and now they’re getting one-eighth of 1 percent,” says Trump. “I think that’s unfair to those people.”
Trump hasn't made any formal announcements of his cabinet picks, but has suggested he would appoint financier Carl Icahn to lead the U.S. Treasury. Icahn said he would decline
the job offer.
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