Outgoing Fed chief warns against Trump tax cuts

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Outgoing US central bank chair Janet Yellen has appeared before Congress in her last scheduled testimony.

It was an opportunity for lawmakers to reflect on a tenure that produced some impressive figures and broke the glass ceiling for women at one of the world's most powerful central banks. But that wasn't enough for President Trump, who dismissed her from office.

The first woman to run the US Federal Reserve signed off on an upbeat note.

"With the job gains this year, 17 million more Americans are employed now than eight years ago. Meanwhile the unemployment rate is nearly six percentage points below its peak in 2010," noted Yellen.

But those numbers and Yellen's careful timing of interest rises to nurse the economy back to health were not enough to save her job.

US President Donald Trump and Jerome Powell in the Rose Garden after a press conference at the White House, November 2, 2017. /VCG Photo

Donald Trump broke a tradition for presidents to retain their predecessor's Fed chiefs, by replacing Yellen after just one term with Jerome Powell.

Powell wants to ease regulations blamed for putting some small lenders out of business. While Yellen supports that, she warned against relaxing the rules for the biggest financial institutions whose excessive risk taking almost destroyed the global economy in 2008.

"I would not want to see those things rolled back. I think it would be a very dangerous thing to do," said Yellen.

She is equally concerned about the social impact of aggressive tax cuts, which Trump thinks will boost economic growth.

"I am very disturbed and have spoken out for many years about the disturbing trend towards rising inequality and the equity of the tax code is something that I think should, importantly, be taken into account," Yellen told the hearing.

But by the end of next February, Yellen will have left the Fed and no longer be in a position to challenge the divisive US president.

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