Republican presidential hopeful Donald Trump is accusing the U.S. Federal Reserve and President Barack Obama of conspiring to keep interest rates low.
“In my opinion Janet Yellen is highly political and she’s not raising rates for a very specific reason: because Obama told her not to because he wants to be out playing golf in a year from now and he wants to be doing other things and he doesn’t want to see another bubble burst during his administration,” says Trump.
“They are not raising them because Obama has asked them not to raise them. In my opinion, he wants to get out of office, because we’re in a bubble — when those rates are raised, a lot of bad things are going to happen.”
The White House is rejecting the accusations. When questioned on whether President Obama has asked Yellen or anyone at the Reserve Bank to keep interest rates low, White House spokesperson Josh Earnest says, “Of course not”.
“This administration goes to great lengths to ensure that the Federal Reserve can make monetary policies that are in the best interests of the country and the economy.” says Earnest.
Trumps accusations are not unique. During last month’s Republican Presidential candidate debate, Texan Senator Ted Cruz called for an audit of the central bank’s monetary policy decisions, saying the U.S. should move toward a gold backed monetary system.
Other conservative lawmakers of late have been saying the central bank is risking spiking inflation with its policies and decisions in response to the global financial crisis.
A Federal Reserve spokesperson says the central bank had no comment on Trump’s accusations, although one unidentified official says the bank’s “independence is critical to making sound policy decisions.”
At its October meeting the central bank decided against raising interest rates, citing soft inflation and exports as reasons to continue on its historically easy monetary policies.
Although the central bank is not giving any indication when there will be a change in interest rates, many financial experts are saying there will be an announcement made at its December meeting.