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Trump’s single, best economic move: reappoint Yellen.

Summary:
Over at WaPo. I left one extra-wonky point out of the piece, which deserves mention here. There’s an interesting way in which a more hawkish Fed chair–and most of the top candidates other than Yellen fit that bill–would be a double whammy for Trump. First, raising rates would slow growth, which president’s never like. Second, higher rates strengthen the dollar, making our exports less price competitive, which this particular president really wouldn’t like. Yes, Trump is never rational, so no, I don’t believe these sensible (at least, to me) arguments will win the day. But she remains a front-runner, and the huge difference between having someone with her sensibility chairing the Fed versus a much more hawkish chair cannot be overestimated. Thus, this is an important, worthy fight. Share

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Over at WaPo.

I left one extra-wonky point out of the piece, which deserves mention here. There’s an interesting way in which a more hawkish Fed chair–and most of the top candidates other than Yellen fit that bill–would be a double whammy for Trump.

First, raising rates would slow growth, which president’s never like. Second, higher rates strengthen the dollar, making our exports less price competitive, which this particular president really wouldn’t like.

Yes, Trump is never rational, so no, I don’t believe these sensible (at least, to me) arguments will win the day. But she remains a front-runner, and the huge difference between having someone with her sensibility chairing the Fed versus a much more hawkish chair cannot be overestimated. Thus, this is an important, worthy fight.

Jared Bernstein
Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute, and between 1995 and 1996, he held the post of Deputy Chief Economist at the U.S. Department of Labor.

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