What will happen to the Federal Reserve under Trump?

The US president-elect has accused the institution of creating a "false economy"

What will happen to the Federal Reserve under Trump?

Kin Cheung AP/Press Association Images

The Federal Reserve has been on course to raise its baseline interest rate when its Open Market Committee meets next month - however these plans could now be derailed as Donald Trump's economic policies are implemented.

Mr Trump was critical of the politically independent institution on the campaign trail. He suggested that under the leadership of Fed Chair Janet Yellen interest rates were being kept artificially low to aid Barrack Obama.

"Janet Yellen should have raised the rates. She’s not doing it because the Obama administration and the president doesn’t want her to," he said in November of last year.

Mr Trump stated that low rates and an overvalued stock market have papered over economic cracks and created a "false economy."

"She’s (Janet Yellen is) keeping them artificially low to get Obama retired. Watch what is going to happen afterwards. It is a very serious problem. And I think it is very political. I think she is very political and to a certain extent, I think she should be ashamed of herself. But it is not supposed to be that way," he added in September during a media appearance in-which he also questioned the independence of the Department of Justice and the FBI.

It has been suggested that Janet Yellen may walk away from the post following Trump's victory.

After all of the campaign-trail talk it remains to be seen how Mr Trump's economic policies will play-out.

Plans to increase infrastructure spending, slash corporate tax, and to renegotiate trade deals could create inflationary pressure and mean rate hikes.

On the other hand, if his policies fail and lead to a stalling of the country's fragile economic recovery, low rates could be here for the foreseeable future.