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When it comes to US President Donald Trump's criticism of the Federal Reserve for raising interest rates this year, the former central bank deputy chairman has a message for him: "Don't do it."
Trump's statement could backfire for him by encouraging further interest rate increases, rather than declines, Stanley Fischer said This time host guest Piya Chattopadhyay
"When you criticize the Fed the way you do, you challenge its independence," Fischer said. "And when you challenge independence, it must show its independence."
Trump, who personally chose Jerome Powell as Fed chairman, has repeatedly berated Powell and the central bank this year, at one point calling the Fed "My biggest threat."
The president argued that a rate hike could hurt the stock market, and some investors were equally vigilant.
But Fischer said that if Trump continued to attack Powell, the head of the central bank must find a way to show "he will not be rocked by the president."
"We know very well that if inflation is out of control, the Fed will be blamed," Fischer said. "And that is one of the things that must be taken into account."
To learn more about the role of the Federal Reserve in the US economy and central banks in general, Chattopadhyay spoke to:
- Stanley Fischer, former deputy chairman of the Federal Reserve from 2014-2017, and former governor of the Israeli Bank.
- Livio Di Matteo, professor of economics at Lakehead University.
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Written by Kirsten Fenn. With files from CBC News. Produced by Richard Raycraft and Sarah-Joyce Battersby.