Trump accuses Fed of keeping rates low to help Obama

Republican presidential candidate Donald Trump

NEW YORK (Reuters): Republican White House contender Donald Trump on Tuesday accused the U.S. Federal Reserve of keeping interest rates low at the request of Democratic President Barack Obama.

Trump, speaking at a news conference, also called Fed Chair Janet Yellen “highly political.”

His comments made him the latest Republican presidential candidate to bash the U.S. central bank. At a debate last month, U.S. Senator Ted Cruz of Texas criticised the Fed, saying he thought its monetary policy decisions should be audited and that the country should move toward a system backed by gold.

The Fed has been a target of some conservative critics in the U.S. Congress, who say the central bank risked sparking inflation with its policies in response to the global financial crisis.

Fed officials say their independence is critical to making sound policy decisions.

Asked whether the Fed should raise rates, Trump said it should but would not for “political reasons.”

“They are not raising them because Obama has asked them not to raise them,” the billionaire developer said. “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.”

He added, “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.” Obama is due to leave office in January 2017.

A Fed spokesman said the central bank had no comment on Trump’s accusations.