AP FACT CHECK: Trump on Federal Reserve
WASHINGTON (AP) — A claim from the presidential debate and how it stacks up with the facts:
TRUMP: “The Fed, by keeping interest rates at this level, the Fed is doing political things. ... The Fed is being more political than Secretary Clinton.”
THE FACTS: This is a recurrent claim by Trump with no evidence to back it up. It’s the Federal Reserve’s job to help improve the economy and to the extent that happens, political leaders and their party may benefit. But presidents can’t make the Fed, an independent agency, do anything.
Under former chairman Ben Bernanke and current chairwoman Janet Yellen, the Fed has attracted controversy by pegging the short-term interest rate it controls to nearly zero for seven years. After one increase in December, it is still ultra-low at between 0.25 percent and 0.5 percent, a rate that some economists worry could spark a stock-market bubble or inflation. Bernanke was initially appointed by Republican President George W. Bush, and reappointed by President Barack Obama.
One reason Yellen is keeping rates low is that, in some ways, she agrees with Trump that hiring needs to keep growing to provide jobs for Americans who want them.