By Kate Davidson and Greg Ip
An economic adviser to Donald Trump on Wednesday said the president-elect isn't seeking Federal Reserve Chairwoman Janet Yellen's resignation, despite a swirl of speculation in recent weeks that he might pressure the central bank leader to step down.
"He's not urging her to resign at all," Judy Shelton, an economist and senior fellow at the Atlas Network who advises Mr. Trump on monetary policy, told The Wall Street Journal.
Ms. Yellen's term as chairwoman expires in February, 2018. Ms. Shelton suggested Mr. Trump wouldn't nominate Ms. Yellen to a second term and instead would name someone elseto take the helm. Paraphrasing Mr. Trump's comments, Ms. Shelton said, "He's saying he'd want someone whose thinking is more in keeping with his own."
The Fed found itself in the GOP candidate's crosshairs in the final week of his campaign. He accused the central bank and Ms. Yellen of keeping rates low to help President Barack Obama and, by extension, his Democratic rival Hillary Clinton. He also accused Ms. Yellen of being "highly political."
That was a shift from just six months ago, when Mr. Trump said he didn't think Ms. Yellen was doing a bad job at the Fed but that he would likely seek to replace her with a Republican when her term was up.
Her term as a member of the Fed Board of Governors expires in January, 2024, and she could stay in that role until then regardless of whether she's chairwoman. However, Fed leaders have traditionally left the central bank when their term in the top job ends.
Mr. Trump has also said the Fed's low-rate policy has created a "false economy," which could in turn lead to financial instability. His comments have drawn rebukes from economists and from Mrs. Clinton, who warned they could undermine the Fed's independence.
Ms. Shelton said on Wednesday that Mr. Trump, "never bought the idea the Fed should be off limits."
Though Ms. Shelton doesn't speak for the Trump transition team, her comments suggest that GOP efforts to rein in the central bank could get a friendly reception in the White House next year.
Write to Kate Davidson at firstname.lastname@example.org and Greg Ip at email@example.com
(END) Dow Jones Newswires
November 09, 2016 16:26 ET (21:26 GMT)
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