Trump doesn’t understand economics, says former Fed chair Janet Yellen

A former chair of the US central bank has sharply criticised President Trump’s economic knowledge.

In an interview on US radio, Janet Yellen said he did not understand economic policy or the key purpose of the US Federal Reserve.

Janet Yellen also said that Mr Trump’s focus on the US-China trade deficit was misguided.

The US and China have been in a year-long dispute, which has seen the imposition of trade tariffs.

Ms Yellen, who left the Fed in 2018 and is now at the Brookings Institution research group, also said President Trump’s attacks on current Fed chair Jerome Powell were harmful to the public’s confidence in the central bank.

Asked by American Public Media’s Marketplace programme if she thought the president had a grasp of macroeconomic policy, she replied: “No, I do not.”

She went on to say Mr Trump did not seem to understand the Fed’s two responsibilities of controlling inflation and supporting employment.

“Well, I doubt that he would even be able to say that the Fed’s goals are maximum employment and price stability, which is the goals that Congress have assigned to the Fed,” Ms Yellen told the programme.

On the trade gap with China, she said: “When I continually hear focus by the president and some of his advisers on remedying bilateral trade deficits with other trade partners, I think almost any economist would tell you that there’s no real meaning to bilateral trade deficits, and it’s not an appropriate objective of policy.”