Yellen, US Treasury: "Weakening Democracy Threatens Fed"... Checks on Trump

Janet Yellen, former Chair of the U.S. Federal Reserve (Fed) and current Secretary of the Treasury, warned that if the American democratic system is threatened, it would endanger the Fed's independence and, furthermore, damage economic growth and financial stability in the United States and worldwide. Her remarks are seen as a check against former President Donald Trump ahead of the upcoming November election.

On the 1st (local time), Bloomberg News reported this by pre-releasing an excerpt of Yellen's speech scheduled for the 3rd in Sedona, Arizona.

Janet Yellen, U.S. Secretary of the Treasury
Photo by Yonhap News

According to the excerpt, Yellen stated, "I advocate for the Fed's independence and transparency because I believe they are crucial for financial stability and economic growth." She also criticized supporters of former President Trump, mentioning the January 6th Capitol riot, saying they were incited by lies and threatened democracy.

In the market, there is speculation that if former President Trump wins the November election, he might politically intervene by pressuring the Fed to lower interest rates. Yellen's remarks are interpreted as a preemptive warning against political interference in the Fed under a potential second Trump administration.

Earlier last month, The Wall Street Journal (WSJ) reported that close aides of former President Trump were drafting plans to weaken the Fed's independence. During his term, Trump repeatedly criticized Fed Chair Jerome Powell over the Fed's high interest rate policy.

Yellen added, "It has been shown that the greater the Fed's independence, the higher the price stability, which significantly contributes to long-term growth," and emphasized, "Democracy is important for building and maintaining a strong economy," adding, "Weakening democracy undermines the foundation for sustainable and inclusive growth."

This content was produced with the assistance of AI translation services.