Jim Bianco Blasts Janet Yellen For Saying Tighter Lending Would Negate Need For More Rate Hikes: 'To Be This Cavalier...'

Jim Bianco, President of Bianco Research LLC, has criticized Treasury Secretary Janet Yellen for her take on how a pullback in lending could be a substitute for further interest rate hikes.

"I cannot tell you how much I detest this thinking. It’s akin to saying the guy with the blowtorch in your house is doing some of Orkin’s work to get rid of your bugs. To be this cavalier about the loss of business opportunities, jobs, and investment returns just so the precious Federal Reserve can deflect criticism from them to the banks, never mind the Fed would be the major reason the banks are pulling back, is terrible," Bianco tweeted.

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Last week, Yellen had said in an interview with CNN that banks may become more cautious and tighten their lending amid recent banking failures and doing so would negate the need for further interest rate hikes from the Federal Reserve.

“We already saw some tightening of lending standards in the banking system before that episode, and there may be more to come,” she said, adding that the lending pullback “could be a substitute for further interest rate hikes” the Federal Reserve needs to make.

Recession: Bianco further argued that if the economy tips into recession, President Joe Biden's administration will turn on the Fed and Chair Jerome Powell ‘faster and harder' than former President Donald Trump ever did.

“Is Yellen (and Brainard) ready to destroy the Fed to get Biden re-elected? Remember how things work in Washington,” he tweeted.

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