Donald Trump Attacks Federal Reserve, Yellen During Debate

Republican presidential nominee Donald Trump redoubled his attack on the Federal Reserve and its chairwoman, Janet Yellen, accusing the central bank of "doing political things" by keeping interest rates low.

"When they raise interest rates, you're going to see some very bad things happen, because they're not doing their job," Mr. Trump said during a debate with Democratic presidential nominee Hillary Clinton, accusing the Federal Reserve of being "more political" than his rival.

Mrs. Clinton didn't comment on Mr. Trump's remarks about the Fed. But she has previously described it as inappropriate for candidates and presidents to weigh in on Fed actions.

Ms. Yellen last week denied that the Fed takes politics into account in its decision making. "I can say, emphatically, that partisan politics plays no role in our decisions about the appropriate stance of monetary policy," she said during a press conference after the Fed's policy meeting, at which it decided to leave rates unchanged.

Mr. Trump also said the U.S. economy is in a "big, fat, ugly bubble," and warned of a stock market crash when borrowing costs rise. Mr. Trump's concerns about bubbles are shared by some economists, including at the Fed. Some Fed officials have said that putting off a rate increase could spark dangerous asset bubbles that could destabilize the financial system. Low interest rates reduce returns for savers, pushing investors to seek higher returns in other�potentially more risky�financial investments.

The Fed pushed short-term interest rates down to near zero in 2008 during the financial crisis and held them there until last December. The central bank raised them up a quarter percentage point then and hasn't touched them since. Last week, it held short-term interest rates in a range between 0.25% and 0.50% but signaled it still expected to raise them before year-end.

Mr. Trump has taken aim at the Fed on several occasions recently, accusing Ms. Yellen of creating a "false economy" by keeping interest rates low to help President Barack Obama.

He also has praised Ms. Yellen, saying just four months ago that he had "great respect" for her and he warned that raising rates "would be a disaster."

Write to Harriet Torry at