Journalist Marty Crutsinger Looks Back On 32 Years Of Intense Pressure On Fed Chairs

There’s no question that Federal Reserve Chair Janet Yellen is under a huge amount of pressure to determine the right time to raise interest rates following the worst U.S. recession since the Great Depression. Raising interest rates too quickly could derail the economy’s fragile expansion, while waiting too long could leave the economy vulnerable during the next downturn.

In a new video, AP journalist Marty Crutsinger discussed the political pressures all Fed chairs have faced since he began covering the Fed 32 years ago.

Crutsinger believes pressure on the Fed peaked under Paul Volcker in the 1970s. Volcker chose to combat extreme inflation by raising interest rates to their highest level since the Civil War.

“People were very upset,” Crutsinger explained. “Home builders were mailing in 2x4s to the Fed in Washington, saying, ‘Take this lumber because we can’t build houses with it.’”

Crutsinger noted that Volcker’s successor Alan Greenspan was probably the best Fed chair at handling the pressure.

“He faced multiple pressures when he was Fed chairman, but he could play the game of Washington politics better than anybody else.”

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Ben Bernanke was almost immediately thrown into fire when he took over for Greenspan just prior to the Financial Crisis, and he faced tremendous political pressure over his quantitative easing programs.

“Bernanke used extraordinary measures at the Fed,” Crutsinger recalled. “Those measures worked, but critics said they were making the Fed too big and too powerful.”

Today, Janet Yellen is tasked with managing interest rates at a time when the U.S. economy has been sending mixed signals.

“Janet Yellen is facing political pressure from Republicans in Congress and also from presidential candidate Donald Trump, but this is nothing new,” Crutsinger concluded.

This week, the Federal Reserve decided not to raise interest rates in September. A recent Reuters poll found that economists now see a 70 percent chance of a December rate hike. 

Watch the full video below: