Former Federal Reserves Chair Janet Yellen has called US president Donald Trump’s probe of the Federal Reserve and its chairman Jerome Powell the road to ‘Banana Republic’.
Yellen, who served as Treasury secretary after leaving the Fed, added that she thinks financial markets should be more concerned about the situation that she called “extremely chilling.”
“I’m surprised the market isn’t more concerned. It seems to me that the market should be concerned,” Yellen said, according to CNBC’s Sara Eisen.
“You have a president that says the fed should be cutting rates to lower rate payments on the federal debt,” Yellen said, adding she “completely [disagrees with that. It is the road to banana republic.”
The comments come the day after Powell confirmed he’d been made aware that the U.S. Attorney’s Office in Washington, D.C., is looking into whether the central bank leader lied during testimony he provided to Congress last June about an expensive renovation project at the Fed’s headquarters. The office is led by Jeanine Pirro, a Trump confidante and former Fox News host.
“Knowing Powell as well as I do, the odds that he would have lied are zero so I do believe they’re going after him because they want his seat and want him gone,” she said.
Yellen’s Federal Reserve Stint
Yellen served during the first year of Trump’s initial term as president but was replaced the following year by Powell after her term ended. She went on to serve under former President Joe Biden as the head of Treasury, the first woman to hold either position.
During her time at Treasury, critics charged Yellen used the levers of debt issuance to underwrite a ballooning national debt. Trump has badgered the Fed to lower rates, in part to ease financing costs of a debt burden currently at $38.4 trillion.
