Federal Reserve Chair Janet Yellen thinks Donald Trump has the Fed wrong.
Yellen was asked Wednesday by The Wall Street Journal’s Jon Hilsenrath whether the Fed was keeping interest rates low in order to protect the Obama administration and, by extension, help Democratic presidential candidate Hillary Clinton win November’s election.
“We do not discuss politics at our meetings and we do not take politics into account in our decisions,” Yellen said during a press conference Wednesday.
In an interview on CNBC earlier this month, Trump, the Republican nominee for president, said Yellen should be “ashamed” of keeping interest rates low for so long.
“She’s obviously political and doing what Obama wants her to do, and I know that’s not supposed to be the way it is, Trump said.
Trump added that the Fed has created a “false stock market” due to its low interest rate policy.
In response to Hilsenrath’s question on Wednesday, Yellen emphasised that the Fed is a politically independent entity, saying, “I think Congress very wisely established the Fed as an independent agency in order to insulate monetary policy from short-term political pressures.”
“I can say emphatically that partisan politics play no role in our position about the appropriate stance of monetary policy,” Yellen said.
In a follow-up, Binyamin Appelbaum of The New York Times asked why the Fed did not mention the presidential election as a risk to the economy, given that the Fed had referenced the UK’s “Brexit” vote in statements earlier this year.
“We are very focused on evaluating the way the economy is operating and what is the right policy to foster our goals,” Yellen said. “I am not going to get into politics. Those are factors we don’t consider and I’m not going to get involved in commenting on the election.”
The Fed maintained its interest rate policy of targeting a Fed Funds rate inside a corridor of 0.25%-0.50%.
The Fed last raised interest rates in December.
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