Fed rate rise prompts questions about Yellen's future

The US Federal Reserve has raised interest rates for the second time this year.

But the latest increase has prompted speculation about how much longer
the Federal Reserve chair Janet Yellen will remain in post.

Her four-year term ends next February, and before then US President
Donald Trump needs to decide if he'll reappoint her.

Once a fiery critic of the Fed boss, President Trump's opinion of her
seems to have softened.

Nick Harper reports from New York.

IN: "Janet Yellen..."
OUT: SOC
DUR: 2:46

AIR: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-air.mp3
ARN: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-arn.mp3
938 LIVE: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-938.mp3
FM4: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-fm4.mp3
ICRT: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-icrt.mp3
NIGERIA: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-von.mp3
RNZ: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-rnz.mp3
VATICAN: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-vat.mp3
ZIZ: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-ziz.mp3
GENERIC: http://www.fsnradionews.com/feeds/0615yellen-pkg-nh-gen.mp3


TAKE VO
Janet Yellen's calm, collected manner has steadied the Fed since her
appointment in 2014.
She eased in interest rate rises. But now she's picking up the pace
with the second rate rise of 2017, the third in the last six months.
TAKE VO
In the run up to the election Candidate Trump repeatedly accused her
of keeping interest rates low to help the man who appointed her,
President Obama.

SOT - Trump "We have a Fed that's doing political things, this Janet
Yellen of the Fed. The Fed is doing political things, by keeping the
interest rates at this level."

TAKE VO
But now as President, Donald Trump recently told the Wall St Journal
he likes and respects her.
Which is perhaps unsurprising. As he now wants the low rates he
previously criticized, to help the economy he's inherited. Which is
quite a u-turn says Chief US economist for TS Lombard, Steve Blitz.

SOT - Steve Blitz
"He was playing to base by saying all these things, and you know, I
get it. But now that he's President and he sees there are
consequences, and there's consequences to his personal portfolio and
Wilbur Ross' personal portfolio and everyone else's personal
portfolio, they're going to be a little less loose-lipped so to
speak."

TAKE VO
Indeed Yellen's more cautious approach should suit the President.
Here's Professor Joseph Foudy, from NYU Stern School of Business.

SOT - Professor Joseph Foudy
"No politician wants a tougher central bank governor in office when
they're there. // Compared to anybody that would replace her she's
probably relatively more dovish. We're going to see interest rate
increases either way. But if I was the President facing mid-terms and
re-election I would want someone who was going to be more gentle on
inflation because the risks or danger are longer-term, the benefits of
monetary policy are short-term."

TAKE VO
Yellen has signaled another rate rise before the end of the year, and
3 next year.
So even with the President's shifting opinion, some economists feel
Yellen is likely to go.
Here's Steve Blitz again.

SOT - Steve Blitz
"I would be very surprised if she's reappointed. I'm not going to tell
you there's a zero probability which I might have said a year ago, or
should I say the day after the election. But I think that she is
probably going step down."

TAKE VO
Asked about her future plans Yellen on Wednesday said she hadn't
discussed them with the President. But hoped to stay in post until the
end of her term.
TAKE VO
Either way the big problem for the President is he wants to rev up the
economy's engine, to spur on growth.
While the Fed are worried that will trigger inflation, so will use
interest rate rises to stop the economy from overheating.
And that puts the Fed chair Janet Yellen on a collision course with
the President
Nick Harper, SOC, New York

ENDS