Former Federal Reserve Chair Janet Yellen Janet Louise YellenFed formally adopts new approach to balance inflation, unemployment Federal Reserve chief to outline plans for inflation, economy The Hill's Morning Report - Presented by Facebook - First lady casts Trump as fighter for the 'forgotten' MORE said Monday that President Trump Donald John TrumpSteele Dossier sub-source was subject of FBI counterintelligence probe Pelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' Trump 'no longer angry' at Romney because of Supreme Court stance MORE’s recent attacks on the central bank could harm the Fed and endanger the global financial system.

Yellen, who led the Fed from 2014 through February, said Trump’s criticism of recent Fed interest rate hikes are “essentially damaging to the Fed and to financial stability,” according to multiple reports.

“I really think it is not a desirable thing for a president to comment so explicitly on Fed policy," Yellen said at the Mortgage Bankers Association convention in Washington.

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Trump last week escalated his criticism of the Fed by blaming the central bank for a steep two-day stock market slide and saying its leaders had gone “crazy” and were “making a mistake” with its “ridiculous” rate hikes.

The president’s comments raised eyebrows in Washington and on Wall Street, but had no apparent impact on U.S. markets.

Lawmakers also brushed off Trump’s shots at the Fed, saying they saw no effort from the president to manipulate the independent central bank.

Yellen raised the stakes Monday, arguing that Trump’s comments could severely tarnish the Fed’s credibility.

“I do think the Fed has a strong reputation for acting in an independent and nonpolitical way, and I would not like to see that reputation damaged,” said Yellen, who Trump declined to renominate to lead the Fed.

Since July, Trump has frequently criticized the Fed for raising interest rates from near-zero levels, a process it began in December 2015. The central bank has raised rates eight times since 2015 and six times under Trump, who often touts his preference for cheaper borrowing costs.

Trump had considered renominating Yellen to lead the Fed in the hopes that she’d keep interest rates low. Yellen, appointed to the Fed by former President Obama, was criticized by Republicans for holding off on rate hikes in an effort to let the economy expand to full potential.

Trump chose to elevate Powell, then a Fed governor, to be chairman in 2017. Powell is a Republican who nonetheless voted in lock step with Yellen to keep interest rates lower for longer.

Powell took control of the Fed in February and the bank has raised interest rates three times under his watch. Trump has told reporters that he’s “not thrilled” with Powell for raising rates and has privately griped that he expected the chairman to hold off on hikes.

Trump breaks from most Republicans and right-leaning economists who believe rate hikes are critical to prevent the economy from overheating. While higher interest rates tend to slow growth, loose financial conditions with record-low unemployment could cause rampant inflation.

Yellen, who raised rates four times between 2015 and 2018, said she feared the economy could overheat if the Fed doesn’t bring rates back toward historically neural levels.

“Growth needs to slow to stop the unemployment rate from falling ever further, which I believe will eventually create inflationary pressures," Yellen said.

