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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Yellen seen resisting pressure to resign if Trump wins election

Federal Reserve Chair Janet Yellen speaks to a conference of business leaders during an address at the Federal Reserve Bank of Boston on  Oct. 14,  in Boston. (Charles Krupa / Associated Press)
By Rich Miller Bloomberg

WASHINGTON – Federal Reserve Chair Janet Yellen will resist pressure to step down should Donald Trump be elected president next month.

That’s the firm conviction of people who’ve known and worked with her over the years. They described speculation in financial markets to the contrary as off base.

“It’s ridiculous,” former Fed Vice Chair Alan Blinder said of suggestions Yellen would leave the central bank if Trump wins the Nov. 8 election. “I’m just as sure as I can be that she would never do that,” added Blinder, who worked with Yellen at the Fed from 1994 to 1996.

Trump, who is running well behind Hillary Clinton in many opinion polls, has slammed the Fed chief for keeping interest rates low, a policy he says is designed to help cement departing President Barack Obama’s legacy.

While he could make it very uncomfortable for her to stay, Trump as president would not have the authority to fire Yellen because the central bank is an independent institution within the government. Members of the Fed board may not be removed from office for their policy views.

Trump’s scathing criticism has nevertheless led to some speculation that Yellen might step down before her four-year term ends in February 2018 if the billionaire Republican triumphs.

Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, said Yellen could resign if Trump were elected. Morgan Stanley strategists included a Yellen resignation as a possible post-election outcome in their election briefing earlier this year, though they rated it low-probability.

Blinder, who is now a professor at Princeton University, said it would be “cowardly” for the Fed chair to give way in the face of political pressure. She also would undercut the independence of the Fed if she did so.

“It would be bad for her and it would be bad for the institution,” he said.

Andrew Rose, who has known Yellen for more than a quarter of a century, said she’s not someone who would resign in the face of pressure from Trump. “I just couldn’t imagine her stepping down because of him,” said Rose, who teaches at the University of California, Berkeley, where Yellen is a professor emeritus.