Janet Yellen Says Donald Trump Can’t Bully the Fed

September 21, 2016, 7:56 PM UTC

Fed Chair Janet Yellen isn’t pleased with the rhetoric of Donald Trump.

During a press conference with reporters on Wednesday—following the Federal Open Market Committe’s (FOMC) decision not to raise interest rates—Yellen vigorously fought back against insinuations by the Donald Trump campaign that the Fed is politically motivated.

“I can say emphatically that partisan politics plays no role in our decisions” whether or not to raise interest rates. “We do not discuss politics at our meetings.”

Trump has commented often on the Federal Reserve and its chair, often saying contradictory things over the course of his more than year-long campaign. Recently, however, he has taken to arguing that the Fed is actively working for his opponent. He told CNBC earlier this month that Yellen is “keeping [rates] artificially low” to help the Obama administration and, by extension, his Democratic opponent Hillary Clinton. Trump has even called into question the very statistics, like the unemployment rate, that the Fed uses to judge the economy.

Earlier this year, Trump told Fortune that Yellen had been doing a “serviceable job” but that he would probably would not reappoint her if he becomes president.

Congress has taken steps to make sure that the Federal Reserve is insulated from politics, like stipulating that the Federal Reserve is self-funding, and that its budget is not determined by Congress. In addition, Fed Board Board members serve staggered 14-year terms, making sure that no one president can radically change the composition of the central bank.

Nevertheless, Trump continues to allege that Yellen is beholden to President Obama and his preferred successor, Hillary Clinton. And these allegations may play a part in the public’s declining faith in the Federal Reserve’s ability to do the right thing for the economy. Because the Fed relies on the public’s and market’s faith in its probity, Yellen was strident in her denial that politics affects central bank decision making. “It’s my commitment to the American people that I want to lead an institution that is not political,” Yellen stressed. “I assure you that you will not find any signs of political motivation when the transcripts [of FOMC] meetings are released five years from now.”


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