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Trump’s push to cut interest rates has echoes of ‘banana republic’, says Yellen (www.theguardian.com)

submitted 23 hours ago by Powderhorn@beehaw.org to c/politics@beehaw.org

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The former US Federal Reserve chair Janet Yellen has attacked Donald Trump’s push for lower interest rates, comparing it to the actions of a “banana republic”.

The US president has repeatedly urged the central bank to slash interest rates, in the hope of cutting the government’s borrowing costs on its $39tn (£29tn) debt.

In a post on his Truth Social platform in January, Trump wrote: “We should be paying the LOWEST INTEREST RATE OF ANY COUNTRY IN THE WORLD.”

Speaking at an HSBC investor summit in Hong Kong, Yellen said: “How often does the president of a developed country express the view that the interest rate should be set to reduce the debt service cost? This is what you hear in a banana republic.”

She argued that inflation can get out of control if central banks fall under the control of politicians whose aim is to borrow more cheaply.

I don't think Trump gives a shit about Treasury debt. He just wants to be able to grift for cheaper.

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[–] thefluffiest@feddit.nl 3 points 19 hours ago

Orange Republic*

[–] GhostOnTheHalfShell@masto.ai 1 points 23 hours ago

@Powderhorn

The real poison is politicizing monetary policy, but I will be very blunt about this manipulating interest rates only preserves the purchasing power of creditors, interest income.

Using interest rates to shape economic activity is like feeding horses, oats to guide the direction of a carriage.