After months of surprising restraint, Donald Trump has finally started spewing conspiracy theories about the Federal Reserve. During an interview with CNBC on Monday morning, the Republican presidential nominee suggested that Fed Chair Janet Yellen is keeping interest rates low in order to pump up a “false” stock market during President Obama’s final months in office. “She’s obviously political,” he said. “She’s doing what Obama wants her to do. And I know that’s not supposed to be the way it is. But that’s why it’s low. Because as soon as they [interest rates] go up, the stock market is going to go way down.” For good measure, he added that Yellen “should be ashamed of herself.”

This is somewhat surprising, since Trump has been moderately supportive of the Fed chief in the past. “I’m not a person that thinks Janet Yellen is doing a bad job,” he told Reuters in May.* “I happen to be a low-interest-rate person unless inflation rears its ugly head.”

Why the switch? One reasonable-seeming assumption is that Trump has lashed out because he truly believes the Fed is trying to help his opponent, Hillary Clinton. The Fed has held off on interest rate hikes this year. Meanwhile, the economy is adding jobs at a reasonably healthy pace. Despite a big dip in the past few days, the stock market has generally been hovering around new heights. That’s undoubtedly boosted Obama’s approval rating, which in turn improves Clinton’s own chances. To suggest Yellen is in the bag for his opponent would also fit Trump’s argument that a corrupt political establishment is trying to rig the system against him. He even sort of seemed to suggest so much later in the interview, after an anchor asked him about the subject of Federal Reserve independence, by bringing up the Justice Department and FBI’s handling of Hilary Clinton’s email server.



Trump: Janet Yellen should be ‘ashamed’ of what she’s doing to the country https://t.co/JNXQGMTBfQ pic.twitter.com/AluINVfTfd — CNBC (@CNBC) September 12, 2016

“I used to think that the Justice Department worked independently also, and I used to think the FBI was independent also, but that’s obviously not possible because Hillary Clinton is guilty as hell, and everybody knows it,” Trump said. “I used to hope that the Fed was independent. And the Fed is obviously not independent. It’s obviously not even close to independent.”

And yet, if such a grand establishment conspiracy is what Trump is thinking, he didn’t complete the thought out loud. Instead, he really seemed to suggest this was all about President Obama’s legacy.

“They want to keep the market up so Obama goes out and let the new guy—whoever that new, let’s call it the new guy, because I like the sound of that much better—so the new person who becomes president, let him raise interest rates, or let her raise interest rates, and watch what happens to the stock market when that happens, OK,” Trump said. He later added that interest rates wouldn’t go up much in the next few months because Obama “wants to go out, he wants to play golf for the rest of his life, and he doesn’t care what’s going to happen after January.”

So Janet Yellen isn’t raising interest rates because Barack Obama wants to play golf. Right.



In the end, it doesn’t matter what precise conspiracy Trump is alleging. First, even the vague idea that Yellen is doing the White House’s bidding is absurd. There was a time when that sort of collusion was a real concern. During the 1970s, Richard Nixon pressured Fed Chair Arthur Burns to pump money into the economy in order to boost his re-election bid, which helped unleash the nasty inflation the decade is remembered for (there’s been some historical debate about whether Burns ultimately lowered rates to placate Nixon, or for his own opaque reasons). Modern central bankers, however, are fiercely protective of their independence. Yellen, for her part, has made it clear she would like to raise rates sooner rather than later. And while it’s true that the central bank has seemingly been worried about triggering market turmoil with a hasty rate increase, that’s because monetary policymakers generally don’t like sowing panic among investors—not because they’re fretting over the president’s tee time.

Even if Trump’s message is muddled, however, it’s still damaging. Other presidential candidates have taken shots at the Federal Reserve or threatened to curtail its autonomy—Texas Gov. Rick Perry famously suggested ex-chair Ben Bernanke’s policies could be “treasonous,” while Mitt Romney supported Ron Paul’s push to “audit” the Fed. But I personally can’t think of another recent case in which a candidate suggested that the central bank was taking orders directly from the White House. Trump, as usual, is escalating the crazy. And I’m sure many of Trump’s fans will believe his rambling. Insofar as they do, he will have succeeded at further eroding trust in another essential institution of American government.

*Correction, Sept. 12, 2016: This post originally misspelled Reuters. (Return.)