Donald Trump has been an outspoken critic of the Federal Reserve for years now. When the Fed announced its third round of quantitative easing back in 2012, he accused the central bank of “creating false phony numbers,” driving down the value of the dollar and risking inflation.
Three years later, Trump couldn’t be more wrong. The dollar has soared in value over the past year, while inflation this year has been so low that Social Security recipients aren’t even getting a cost-of-living adjustment.
But Trump has never been one to let evidence get in the way of a good story, and in a Wednesday interview with Bloomberg Television the Republican Presidential hopeful said that “Janet Yellen for political reasons is keeping interest rates so low that the next guy or person who takes over as President could have a real problem.”
Trump didn’t give any reason for why he believed Yellen was acting for political reasons. And it’s hard to fathom what they could be since there’s plenty of compelling economic evidence, like near-absent inflation and significant labor market slack, for keeping rates at zero—regardless of what President Obama thinks. But Trump did offer another prediction: that the next administration could have a “real beauty” of a recession on its hands when rates are finally raised.
