Ryssdal: Do you think the president has a grasp of macroeconomic policy?
Yellen: No, I do not.
Ryssdal: Tell me more.
Yellen: Well, I doubt that he would even be able to say that the Fed's goals are maximum employment and price stability, which is the goals that Congress have assigned to the Fed. He's made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade. And, you know, I think comments like that shows a lack of understanding of the impact of the Fed on the economy, and appropriate policy goals.
Ryssdal: More broadly, then, his understanding of the effect of his trade tariffs and his withdrawal from, say, the Trans-Pacific Partnership.
Yellen: Well, I think that's creating a lot of uncertainty for businesses, and I think my own view is that those shifts are likely to be adverse for the U.S. economy, to the extent that some of these things are bargaining chips, with the hope of lowering trade barriers generally. I suppose the outcome of that, if it's successful, could be positive …
Ryssdal: It’s a big “if.”
Yellen: It is as a big “if.” And when I continually hear focus by the president and some of his advisers on remedying bilateral trade deficits with other trade partners, I think almost any economist would tell you that there's no real meaning to bilateral trade deficits, and it's not an appropriate objective of policy.
Ryssdal: And the president, of course, China specifically, focuses on that quite a bit.
Yellen: He has focused on that quite a bit, especially with respect to China....