Yesterday, Janet Yellen denied any political influence whatsover on Federal Reserve policy. Donald Trump has suggested otherwise. From Yellen, at a press conference after the Federal Open Market Committee announced its decision not to raise interest rates:
“Well, I think Congress very wisely established the Federal Reserve is an independent agency. In order to insulate monetary policy from short-term political pressures and I can say, emphatically that partisan politics plays no role in our decisions about the appropriate stance of monetary policy. 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 is affecting the outlook. We do not discuss politics at our meetings and we do not take politics into account in our decisions.
That should settle it, although a few of SLL’s more stubborn readers may still believe that Trump is right.
Mrs. Yellen is either outright lying or ignorant. Her employer isn’t independent, it is a private business with stockholders, and it is not an agency as it is not a governmental unit. Finally, it was Unwise of Congress in 1913 to create the “Federal Reserve”.