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“Don't do it”: Trump’s criticism of the central bank may backfire, warns former vice chairman

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When it comes to criticizing US Federal Reserve President Donald Trump for raising interest rates this year, the former deputy chairman of the central bank has one message: “Do not do this”

Stanley Fisher stated that Trump’s remarks could backfire on him, encouraging further increases in interest rates rather than lowering Current guest host Piya Chattopadhyay

“When you criticize the Fed the way you do it, you challenge its independence,” Fisher said. "And when you challenge his independence, he must demonstrate his independence."

Trump, who personally chose Jerome Powell as Fed Chairman, repeatedly criticized Powell and the central bank this year, once calling the Fed "My biggest threat."

US President Donald Trump displeased with the central bank. He claims that it hurts the stock market. (Jacqueline Martin / Associated Press)

The president argues that raising interest rates could damage the stock market, and some investors were equally wary.

But Fisher said that if Trump continues to attack Powell, the head of the central bank will have to find a way to demonstrate that "the president will not shake him."

“We know very well that if inflation gets out of control, the Fed will be blamed,” Fisher said. "And this is one of the things to consider."

To learn more about the role of the Federal Reserve in the US economy and central banks in general, Chattopadhyay spoke with:

  • Stanley Fisher, former Deputy Chairman of the Federal Reserve System from 2014 to 2017, as well as the former Governor of the Bank of Israel.
  • Livio Di Matteo, Professor of Economics at Lakehead University.

Click "listen" at the top of the page to hear the full story.

Posted by Kirsten Fenn. With files from CBC News. Produced by Richard Raekraft and Sarah Joyce Battersby.

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