An Unexpected Alignment

Since the night Donald Trump was elected on the 9th, much of the country has been wondering what the future holds. A wall? A Muslim registry? But for Janet Yellen the question may be, “a job?” The native New Yorker and Chair of the Board of Governors of the Federal Reserve System was cast in a negative light throughout Trump’s campaign. Trump and his advisers criticized Yellen for playing the “political” game when implementing monetary policies.  This criticism makes sense for Trump as his campaign was based around the idea that growth will come from fiscal policies rather than monetary. Now that Trump is the president-elect many believe Yellen will be replaced in February of 2018.

But some speculators do believe that Trump and Yellen vision for the economy could be more in line then it seems on the surface. Trump advocated for large tax cuts and investments in infrastructure which are the same sort of policies that Yellen concluded last month may be the necessary to push the US economy past upcoming periods of stagnation. Fed officials and Fed Governor, Lael Brainard have also expressed similar thoughts of placing more focus on public investment and projects and less on monetary policies. But this alignment doesn’t change the fact that Trump could fill most of the Fed’s member board with his own nominees and replace Yellen. The only thing we can do is hope that Yellen and the Trump administration can work together in the next few years to find a way to stimulate economic growth.

Leave a Reply

Your email address will not be published. Required fields are marked *