Don’t be surprised if Federal Reserve Chair Janet Yellen quits her job leading the central bank as President-Elect Donald Trump takes the White House.
That’s one of the messages from Trump’s upset electoral victory over Democratic rival Hillary Clinton, says Barry Bannister, head strategist at investment bank Stifel.
“There is precedent for a contentious political transition in which Fed independence was a core priority leading to a change in Fed leadership,” he writes in a Nov. 9 report obtained by Newsmax Finance. “Former Fed Chairman Marriner Eccles resigned the Chairman's role in 1948 (Truman was elected) but remained on the Board until the Fed-Treasury Accord of 1951 secured Fed independence from the Treasury.”
During the election, Trump criticized Yellen for keeping interest rates near zero percent, a policy he says was designed to give a lift to President Barack Obama’s legacy of economic failure.
“While he could make it very uncomfortable for her to stay, Trump as president would not have the authority to fire Yellen because the central bank is an independent institution within the government,” Bloomberg News reported. “Members of the Fed board may not be removed from office for their policy views.”
Yellen will resist pressure to step down, according to the newswire.
“It’s ridiculous,” former Fed Vice Chair Alan Blinder said of suggestions Yellen would leave the central bank. “I’m just as sure as I can be that she would never do that,” added Blinder, who worked with Yellen at the Fed from 1994 to 1996.
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