Donald Trump continued his recent attacks of Janet Yellen and the Federal Reserve in an interview with CNBC on Monday morning.
Asked by CNBC’s Becky Quick about Fed policy, the Republican presidential candidate suggested that the independent Fed is actually maintaining record low interest rates until President Obama is out of office.
“[Yellen] is keeping [interest rates] artificially low to get Obama retired,” said Trump. “Watch what’s going to happen afterwards, it’s a very serious problem.”
Trump also suggested the Fed, along with the Department of Justice and the FBI, are not politically independent from the Obama administration.
“I used to think that the Justice Department was independent also and I used to think the FBI was independent,” said Trump. “But that’s obviously not possible because Hillary Clinton is guilty as hell, any third-rate lawyer will tell you that. All you have to do is read and watch. So I used to think they were independent, and the Fed is obviously not independent. It’s obviously not even close to being independent.”
Trump also expressed scepticism over the current ultra-low interest rate policy, saying that the current expansion of debt is going to come back to bite the US economy.
“I would want to have a policy where we can begin to gently reduce debt, because right now it is not under control” said Trump. “What happens if interest rates go up fairly substantially? What happens with all of the money we have and we are borrowing, you know what that does to our balance sheet? I mean that’s a cost that’s beyond belief.”
Trump also expressed concern if interest rates were to return to the level of the 1970s, saying that it would hurt businesses and Americans who have taken on debt assuming interest rates would stay low.
“It’s like the baseball players, they go out and have a good season and they think it is going to happen again,” said Trump. “That’s what we’re doing. We’re living like we’re going to have no interest because they’re so low.”
To be fair, interest rates are generally controlled by the Federal Reserve which has so far not been willing to increase the rate substantially.
In the interview, Trump also said that Senator Elizabeth Warren is wrong in wanting to keep interest rates low, calling her “the least effective” member of the Senate.
The Fed’s next meeting to decide monetary policy is September 20-21. The market currently sees only a 30% chance of a rate hike.
Check out the full exchange below.
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