After Donald Trump criticized US Federal Reserve for playing politics with interest rates and creating a false economy, Fed Chair Janet Yellen came out strongly in September FOMC meeting that the Fed is independent and doesn’t take politics into account. While many expected a similar firm response over Mr. Trump’s continuing criticism in her recent speech and testimony, in reality, Ms. Chair was seen fumbling when it was accused that one of her governors is involved with Hillary Clinton’s campaign.
New Jersey Republican Scott Garrett challenged chair Yellen over the donations made by Federal Reserve Governor Lael Brainard to the Clinton campaign and the unconfirmed report that she is a contender for a senior position in the Clinton administration, namely the treasury secretary. Mr. Garrett asked: “A Fed governor can be in direct negotiations with a political campaign looking for a future job and that is not a conflict as far as you’re concerned?” Chair Yellen said, “I would have to consult my counsel. I’m not aware that that’s a conflict, but I would …” Then she was herself cut off by the committee chair. She also said that she has absolutely no awareness that Ms. Brainard is in touch with the Clinton camp.
Mr. Garrett also said to Ms. Yellen, after she said that politics don’t interfere with Fed’s decision, “Whether you like it or not, the public increasingly believes that the Fed independence is nothing more than a myth and the Fed has an unacceptable cozy relationship, both with the Obama administration and with higher-ups in the Democratic Party.”
Ms. Brainard has previously served as economic adviser to former President Bill Clinton.


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