Janet L. Yellen’s four-year term as the Federal Reserve chairwoman ends on Feb. 3, 2018. Donald Trump has said he will most likely replace her after that. Credit Al Drago/The New York Times
New York Times: With Trump in Power, the Fed Gets Ready for a Reckoning
WASHINGTON — Paul A. Volcker, the Federal Reserve chairman, received an urgent warning two weeks after Ronald Reagan won the 1980 presidential election. Some of the president-elect’s advisers, he was told, wanted to abolish the central bank and replace it with a computer program that would manage interest rates and monetary policy.
Today, a Democratic Fed leader is once again bracing to see whether victorious and emboldened Republicans will try to overhaul the central bank.
In almost three years as the Fed’s chairwoman, Janet L. Yellen has led an aggressive campaign to stimulate economic growth. Donald J. Trump, the president-elect, has embraced criticism that the Fed is causing more problems than it is solving, and he has surrounded himself with advisers who would like to rein in the institution that has the greatest influence over the direction of the nation’s economy.
Mr. Trump can fill a majority of the Fed’s seven-member board with his own nominees over the next 18 months, including replacing Ms. Yellen in February 2018. He also could work with Congress on new constraints, including some form of an old idea on the right that a formula should dictate the Fed’s movements of interest rates.
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WNU Editor: U.S. Fed chairwoman Janet L. Yellen has already signaled that interest rates are going to go up in December, and that Quantitative Easing is over. If there is an issue that gets me all riled up .... it is this one. We have been living a bubble for the past few years .... and it is going to hurt when these measures are imposed .... especially rising interest rates. When I ask all of my friends on what would be the impact on their lives if their interest/mortgage rates go up just 3% or 4% .... the look on their faces says it all. And talk about escaping blame. This hurt is going to be blamed on Donald Trump because he will be in office when all of this unravels .... even though all of the measures and policies that put us in this position were approved under President Obama and a compliant U.S. Congress.