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Tags: Trump Administration | Donald Trump | GOP2016 | donald trump | janet yellen | federal reserve | chairman

Economist Paul Ashworth: 'Yellen Would Resign Fairly Quickly' If Trump Wins White House

Economist Paul Ashworth: 'Yellen Would Resign Fairly Quickly' If Trump Wins White House

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By    |   Wednesday, 28 September 2016 08:22 AM




 

Republican presidential candidate Donald Trump hasn’t kept his disdain of Federal Reserve Chairman Janet Yellen a secret.

In fact, one respected financial voice said he thinks that Yellen would probably quit in short order should Trump win the White House.
 

"If Donald Trump wins November's presidential election, there is now a clear possibility that Fed Chair Janet Yellen would resign almost immediately, perhaps even before the mid-December (Federal Open Market Committee) meeting," Paul Ashworth, chief U.S. economist at Capital Economics, a London-based global forecasting firm, said in a note, CNBC reported.

"It is hard to see how she could continue in her position until her current term expires in early 2018," Ashworth said.

"If Trump wins, we now think Yellen would resign fairly quickly as a matter of principle," Ashworth said. "The main reason for believing that Yellen would resign almost immediately is that falling on her sword would take some of the political heat off the rest of the FOMC," he added.

In Monday night’s presidential debate, Trump repeated his claim that the central bank was keeping interest rates low in order to boost the stock market and help the Obama administration.


“We're in a big, fat ugly bubble and we better be awfully careful and we have a Fed that's doing political things," Trump said.

"This Janet Yellen of the Fed, the Fed is doing political by keeping the interest rates at this level and, believe me, the day Obama goes off and he leaves and he goes out to the golf course for the rest of his life to play golf, when they raise interest rates, you're going to see some very bad things happen because the Fed is not doing their job. The Fed is being more political than Secretary Clinton.”

Trump, in a CNBC interview earlier this month, said that Yellen is “keeping [rates] artificially low” to help the Obama administration and, by extension, his Democratic opponent Clinton. Trump has even called into question the very statistics, like the unemployment rate, that the Fed uses to gauge the strength of the economy. Earlier this year, Trump told Fortune that Yellen had been doing a “serviceable job” but that he probably would not reappoint her if he becomes President.

But another respected economist, Alan Blinder, professor of economics and public affairs at Princeton University, said Yellen wouldn’t just walk away from her duties.

"Should Donald Trump, God forbid, win the presidency, he has every right to put in a new Fed chair," Blinder said. "The notion that she would resign because of ridiculous things that he has said is ludicrous."

A spokesman told CNBC she would not comment specifically on Trump's remarks. Yellen, however, did defenf the Fed's independence during her quarterly news conference Sept. 21.

"I can say emphatically that partisan politics plays no role in our decisions about the appropriate stance of monetary policy," Yellen said in response to a question about Trump's attacks.

"We are trying to decide what the best policy is to foster price stability and maximum employment and to manage the variety of risks that we see as affecting the outlook. We do not discuss politics at our meetings and we do not take politics into account in our decisions."

Meanwhile, Newsmax Finance Insider Dr. Edward Yardeni doesn't think such tough-talking tactics are the best page in Trump's campaign playbook.

 

"I’ve often depicted Yellen as the “Fairy Godmother of the Bull Market.” So it’s possible that the market might react adversely to a Trump victory last night and on November 8. No one likes to see their godmother get beat up by a bully," Yardeni wrote.
 

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Republican presidential candidate Donald Trump hasn't kept his disdain of Federal Reserve Chairman Janet Yellen a secret.
donald trump, janet yellen, federal reserve, chairman
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2016-22-28
Wednesday, 28 September 2016 08:22 AM
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