Former Federal Reserve Chair Janet Yellen defended the central bank’s independence after months of strong criticism from President Donald Trump.
“It’s important for the public and for market participants to understand that the actions that the Fed takes are truly in response to its congressional mandate of maximum employment and price stability. There is some history of Presidents trying to influence the Fed, and reportedly [Richard] Nixon influenced Arthur Burns. It’s important for the sake of the Fed’s credibility and the confidence in the institution,” Yellen added.
Trump has repeatedly criticized the central bank for slowing the economy, even saying the Fed has “gone crazy” by continuing to raise interest rates. After months of strong criticism, Fed Chair Jerome Powell and Trump finally had their first official meeting.
The two sat down at dinner together on Monday for about an hour and a half, with Fed Vice Chairman Richard Clarida and Treasury Secretary Steven Mnuchin also in attendance. Mnuchin described the dinner as “very casual” and said the Fed chief gave the president an overview of the economy.
Yellen served as the central bank’s chief from 2014 to 2018. Powell succeeded her in February last year.