Yellen in the firing line as Trump's comments draw relevance

With just under a year left in her first tenure as Chair of the Federal Reserve, Janet Yellen has been forced to defend the central bank's actions subsequent to the onset of the Financial Crisis as well as field questions about a possible imbalance in over utilising monetary policy in an effort to substitute the shortcomings of the Obama administration's lack of an appropriate economic strategy that failed to produce the necessary growth needed.

Testimony given during Yellen's appearance before the Senate's Banking Committee reveal an intolerable tone setting in as indications begin to emerge on how Republicans are expected to deal with newly incumbent US president's views that the Dodd-Frank Act on financial reforms are stunting the growth of the economy by shutting out small to medium enterprises from raising loans.

Besides this, President Trump has also been noted as saying that the appointment of Janet Yellen was "highly political" and the Federal Reserve was being used to mask the failings of the previous administration. He went on to stress the importance of political independence in the monetary body.

These comments were made while Trump was the Republican presidential nominee.  

Fed’s Yellen spars with legislators on regulation, economy https://t.co/7eD0Rznz6h pic.twitter.com/3lH6Ih1n4O

— Business Day (@BDliveSA) February 16, 2017

Yellen isn't going to find much refuge in the year ahead and will ultimately be pressured to defend the actions of the Fed in the attempt to save its credibility amongst the financial sector.

However there is an argument that's been growing with intensity with every passing year over the sedative response central banks across the globe have taken in normalising the interest rate cycle.

In some cases central banks, like the ECB and BOJ, have taken the decision to continue using easing measures without much success while causing concern with investors over the length of continuity with such programs and it's ability to deliver on it's promises of prospects.

The Fed doesn't have too much pressure in this respect as it's the only major economy to have begun the process of interest rate normalisation, however with that being said, it might very well press Yellen to aggressively lift rates if she's to have any chance of keeping her job ... a fate that still hangs in the balance.