Presidential Position

yellen_5Trump’s plans to replace Fed Chair Yellen on 2/3/18 when her term expires is bad news; she is doing a very good job. What is worse, however, is his attacking the Federal Reserve for being politically motivated. These comments weaken the Fed’s independence. That makes its rate moves possibly less economically-grounded and predictable and increases inflation fears. And that raises risk premia which makes borrowing needlessly more expensive. Enough.

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