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Ron Paul: Yellen vote shows concerns about economy

The Senate vote to confirm Janet Yellen as Federal Reserve chair wasn't as convincing as past confirmations and reveals concerns about a fragile economy, former Rep. Ron Paul told CNBC on Tuesday.

"I think everybody's going to be a little bit worried about what will come in the future, and I think they should have more concern about the system and the Federal Reserve policies themselves rather than one individual," Paul said on "Squawk on the Street." "It's a shame that we've gotten to the point that the markets just hang on every second of everything an individual like the chairman will say. It just is totally bewildering."

Yellen won Senate confirmation Monday by a 56-26 margin. Eleven Republicans voted in favor, and all "no" votes were by Republicans.

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Ron PaulAdam Jeffery | CNBC

The Fed's decision to reduce its massive asset-buying program by $10 billion this month was not a "serious move," Paul said, because the Fed had also given assurances about maintaining ultralow interest rates. That policy helped the stock market achieve record gains in 2013, which seemed to be the intent, he added.

"They think the stock market will translate into a healthy economy," Paul said. "I don't happen to believe that, and most of the people who are unemployed, the lower third of our population, don't believe that."

(Read more: Six years post-recession, a tale of two Americas)

Often described as dovish, Yellen doesn't seem poised to reduce the Fed's nearly $4 trillion balance sheet, he said.

"She is really an inflationist," Paul said. "All the market has to do is say 'boo' and there will be no more tapering and interest rates will stay at zero until the the market overwhelms this mismanagement and central economic planning by the Federal Reserve."

(Read more: For Yellen, headaches are only starting)

A longtime outspoken critic of the Federal Reserve, Paul called for lawmakers to reject Yellen before Monday's vote, arguing that the bank's policies had destroyed "97 percent of the dollar, along with millions of jobs" since its creation. He also criticized the Fed for "crony bailouts" during the financial crisis and for a lack of transparency.

"If confirmed, Janet Yellen will continue this economic foolhardiness, while at the same time arguing that the Fed's actions should be kept secret from the American people," Paul said in the statement. "At a time when the government demands to know everything about our private lives, the American people at the very least deserve transparency from their own government."

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."


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