Former Fed Chair Janet Yellen blasted President Donald Trump in an interview Monday, saying he lacks basic understanding of economics and the mission of the central bank.
“I doubt that he would even be able to say that the Fed’s goals are maximum employment and price stability, which is the goals that Congress have assigned,” Yellen said in an interview with “Marketplace,” a radio show.
Yellen led the Fed from 2014 to 2018 under President Barack Obama. Trump considered reappointing Yellen, but reportedly thought she was too short at 5-foot-3.
Trump has repeatedly bashed his Fed Chair appointment, Jerome Powell, for raising its benchmark interest rate four times in 2018, which helped cause havoc on the stock market, particularly from October through Christmas.
Trump called the Fed “my biggest threat” and “out of control” because it was raising rates too quickly, by his estimation.
“I think comments like that show a lack of understanding of the impact of the Fed on the economy, and appropriate policy goals,” Yellen said.
The Fed is supposed to work independently and free from political interference. Though, it should be noted that all presidents want low interest rates and Fed officials have frequently faced criticism in private, according to former Fed Chair Alan Greenspan.
“The best thing that you can do if you’re in the Fed is put earmuffs on and just don’t listen,” Greenspan said in an October interview with Fox News. “I was at the Fed for 18 ½ years. I got innumerable notes, pledges, requests, et cetera to lower rates. I do not recall a single instance where somebody in the political realm said we need to raise rates, they’re too low.”
Yellen also hit Trump over his focus on bilateral trade deficits, particularly concerning China, who has long held a massive deficit over the U.S. Economists say a trade deficit alone doesn’t reflect the full picture of trade between two countries.
“I think almost any economist would tell you that there’s no real meaning to bilateral trade deficits, and it’s not an appropriate objective of policy,” Yellen said.
