The Asian Financial Forum kicked off this week and among the event’s many luminaries, we had former Federal Reserve Chair Janet Yellen.
Yellen, who spoke at a luncheon moderated by Hong Kong Academy of Finance senior advisor Norman Chan, started off her chat by answering a question about her life after the Fed. “Once a central banker, always a central banker,” she said, and then went on to speak about her career, her predecessors, her successors, and her efforts with climate change.
She was then asked about the letter she; Allan Greenspan, Paul Volker, and Ben Bernanke wrote last year. The letter, which saw four former Federal Reserve chairs call for the independence of the Fed, made quite the stir. Why did they feel the need to write it?
“We wrote this letter because we were quite concerned about President Trump’s criticism of the Federal Reserve,” she said. “President Trump made it clear that he doesn’t believe in central banking…that there must have political influence on the Fed.”
But “policy is best when it’s made by people who look at the facts,” she said, adding that it is also best when done by people working “in the best interest of the country.”
The Q&A moved on to unconventional policy, such as QE, and eventually to the current rift between the U.S. and China, with Yellen acknowledging that tensions have eased between the two but before adding that “we’ve not seen any significant rollback” in Trump’s tariffs and that “more troublesome, difficult” issues loom.
Subsidies on Chinese state-owned enterprises, competition in artificial intelligence, 5G, and other national security-related technology would be “quite difficult to deal with and will have very significant consequences for the global economy,” Yellen said.
If the two nations couldn’t find a middle ground, the world could split into two camps, complicating worldwide trade and muddling global integration. Technological advancements, she said, could slow to a crawl.
“Technologies developed in one place of the world need to be and can be applied throughout the world, and become the base for further progress of technological innovation,” Yellen said.
A world where countries don’t get to learn from one another, where we “lose those synergies…I hope we will not go there.”
Photos & Additional Reporting: Geoffrey Cheng, NexChange Group