September 22, 2016
Now is not the time for fear…
The U.S. Federal Reserve has painted itself into a corner when it comes to interest rates and is being affected by rhetoric from the Republican presidential candidate Donald Trump, according to Michael Harris, head of research at investment banking firm Renaissance Capital.
“(Fed Chair Janet Yellen) says that she won’t go into politics, she won’t go into politics, she won’t discuss it. But I think the reality of the situation is she’s afraid of Donald Trump,” he told CNBC Thursday.
Trump has previously slammed the Federal Reserve, saying it’s doing what President Barack Obama wants by keeping interest rates low. He told CNBC this month that Yellen should be “ashamed” of what she’s doing to the country.
However, Harris believes that Trump would attack the Fed even if it did raise rates because he’s desperately seeking to pick up extra votes ahead of presidential elections in November. The interpretation that the Fed not hiking plays into Donald Trump’s hands is absurd because that’s going to be a “yawner” at the debates, Harris said.
“He’ll (Trump) fish, he’ll try for a day or two if it doesn’t work he’ll move on. So the fact that he’s already attacked the Fed for not hiking, he knows they’re not going to hike, so he’s trying to get some mileage out of it, but that’s not exciting,” he said.
“He’s hoping that they hike, he would have loved it yesterday (Wednesday) because he would have just torn into Yellen and make it an issue because Larry Summers would be sitting in one of these seats talking about how Trump’s actually right,” he added, referring to former Treasury Secretary Summers who went on a Twitter rant Wednesday on why the Fed should not raise interest rates in September or even this year.
Trump has also said he would audit the fed.
It is so important to audit The Federal Reserve, and yet Ted Cruz missed the vote on the bill that would allow this to be done.
— Donald J. Trump (@realDonaldTrump) February 22, 2016