It's appalling to think that the Fed would try to influence an election, says Larry Summers
Posted August 29, 2019 4:12 p.m. EDT
CNN — The Federal Reserve should stay in its lane, whether or not it agrees with the policies of the White House.
So says former Treasury Secretary Larry Summers, who had strong words Thursday for central bankers. He was responding to an op-ed written by former New York Fed President William Dudley for Bloomberg Wednesday, in which Dudley insisted that the Fed's policies shouldn't "enable" President Donald Trump's trade war.
Dudley went on to say "there's even an argument that the election itself falls within the Fed's purview," adding that the central bank should consider how its decisions will affect the outcome of the 2020 election.
"The idea that the unelected, appointed Federal Reserve should seek to use its authorities to damage the economy so as to influence the election against a sitting president is an appalling concept," Summers told CNN's Richard Quest on Quest Means Business.
With his controversial op-ed, Dudley had given "aid and comfort to all the Fed's most severe critics," Summers said.
The former Treasury Secretary called Dudley's opinion the possibly "least responsible statement by a former financial official in decades" in tweet on Wednesday.
The Federal Reserve's independence has been a hot topic given how often Trump criticizes the central bank and calls on it to cut interest rates more aggressively to boost the economy. The Fed delivered its first rate cut since the 2008 financial crisis in July.
Summers said that Fed President Jerome Powell, who was appointed by Trump but is often the focus of the president's criticism, is "doing his job broadly right," given the circumstances.