Something funny happened in late November.
Outgoing Treasury Secretary, and former Fed chair and vice chair, Janet Yellen said that she spoke with Donald Trump’s nominee to be her successor, Scott Bessent, after he was selected for the job. During a Tuesday event organized by the WSJ, Yellen said that in a call before Thanksgiving, she told Bessent, a veteran hedge-fund manager, about the breadth of the job and strength of the department’s staff.
Yellen, who had never worked one day in the private sector let alone a hedge fund where you are only as good as your last trade and only successful if you outsmart most of your peers, reiterated previous warnings against encroaching on Federal Reserve independence and on broad tariff hikes, while expressing regrets on the fiscal situation.
“What research has shown and this is certainly what I see from my own experience is that countries perform better — they have not only inflation performance — but real performance in terms of job creation and growth is also stronger when a central bank is left to use its best judgment without political influence,” Yellen said, apropos of nothing as the Fed is and always has been a political entity to be used and abused by whoever is in power. Case in point: Yellen, like her predecessor Bernanke, kept rates too low for too long so that her Democratic overlords could enjoy a period of relative tranquility (while also spawning what will soon be the biggest financial crisis in US history).
None of that was funny, however. What was is that Yellen also expressed regret over failing to make more progress in narrowing the fiscal deficit during her tenure.
“I am concerned about fiscal sustainability and I am sorry that we haven’t made more progress,” she said adding that “I believe that the deficit needs to be brought down especially now that we’re in an environment of higher interest rates.”
This is really funny for two reasons.
By Tyler Durden
