Yellen not talking future as Trump bides time picking next Fed chief

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The Queens-born Trump and the Brooklyn-born Yellen have once again been neighbours since January 20, when Trump moved into the White House, a few hundred metres from Federal Reserve headquarters.

During his campaign, Trump accused the central bank – and Yellen personally – of “doing political things” by inappropriately keeping interest rates low to spur the economy for then-president Barack Obama but creating a risky investment bubble in the stock market.

Despite the criticism, Yellen, the first woman to lead the Fed, made clear after Trump won the 2016 election that she would remain in her post and defend the central bank’s independence.

She also has defended regulations put in place after the 2008 financial crisis, saying in August that “substantial progress” has been made in the nearly 10 years since on reducing unemployment, keeping inflation in check and lowering financial stability risks.

“The events of the crisis demanded action, needed reforms were implemented, and these reforms have made the system safer,” Yellen said.

Her four-year term at the helm of the board of governors, however, expires in 2018, and Trump has been mum about his plans.

Yellen likewise has refused to talk about her future beyond February 3, when she is due to step down as chairwoman – unless she is renominated and confirmed by the US Senate.

“I have said that I intend to serve out my term as chair, and that I’m really not going to comment on my intentions beyond that,” Yellen said Wednesday, after the Fed announced a major step to reverse extraordinary monetary policies implemented to spur the economy after the financial crisis.

Yellen met with Trump early this year at the White House, a standard event between the head of state and the bank chief.

“I will say that I have not had a further meeting with President Trump,” Yellen told reporters.

Treasury Secretary Steve Mnuchin said last week that Yellen was one of “a lot of good people” under consideration to lead the Fed.

“I’m working closely with the president on the issue. He hasn’t made any decisions, and [reappointment] is one of the things he’s still considering,” Mnuchin told finance news broadcaster CNBC.

Yellen was “obviously quite talented, and she’s being considered,” Mnuchin said. “But there’s a lot of great people that we’ve been meeting with and considering as well.”

Mnuchin declined to say whether Gary Cohn, director of Trump’s newly established White House economics body, the National Economic Council, was under consideration.

Cohn was chief operating officer of Wall Street investment bank Goldman Sachs for more than a decade until he joined the Trump administration. Mnuchin was a 17-year veteran of Goldman Sachs early in his career.

During one of his debates last year with Democratic rival Hillary Clinton, Trump declared that the US economy was “in a big fat, ugly bubble” with a crash looming if the Fed hiked interest rates.

At other times during the campaign, Trump suggested that the current low-interest rate environment was an “asset” that would allow the government to borrow at historically cheap rates for massive infrastructure spending.

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