Former Fed chief Yellen says she's concerned about Trump undermining trust in US central bank

Former Federal Reserve Chair Janet Yellen was considered for a second term at the helm of the central bank before she was replaced in February with Jerome Powell.
Former Federal Reserve Chair Janet Yellen was considered for a second term at the helm of the central bank before she was replaced in February with Jerome Powell.PHOTO: REUTERS

WASHINGTON (BLOOMBERG) - Former Federal Reserve Chair Janet Yellen said she's concerned President Donald Trump's complaints about US monetary policy may undermine confidence in the central bank as she expressed support for more interest-rate increases to keep the economy on track.

"It's important that the public have confidence in the Fed," she said on Tuesday at a conference in Washington.

Yellen, whom the president considered for a second term at the helm of the central bank before replacing her in February with Jerome Powell, also said "I think it's appropriate for the Fed to be raising rates" some more and "I have confidence in my successor and his colleagues."

"Nothing is ever set in stone and I would watch developments very carefully. But at this point it seems to be that at least a couple of more interest rate increases are going to be necessary to stabilise growth at a sustainable pace" and stabilise the labour market so that it doesn't overheat, she said.

Mr Trump has criticised the Fed for raising rates amid low inflation, blamed it for this month's steep stock-market losses, and demurred on the question of whether he would fire Powell.