United States’ GDP growth would have climbed closer to 4% if the effects of Federal Reserve rate hikes had not held on, President Trump said in a TV interview from the World Economic Forum in Davos, Switzerland, Wednesday.
“That was a big blip that should not have taken place,” President Trump told CNBC’s Joe Kernen. “It should not have happened. But it’s one of those things. But we had Boeing. We had the big strike with General Motors. We had things happen that are very unusual to happen.”
In addition, the United States was hit with “some unbelievably powerful storms,” President Trump said. He also said the stock market would be coming in with even higher rates if the Fed did not raise rates so quickly before it cut them three times in Y 2019.
“Now, with all of that, had we not done the big raise on interest, I think we would have been close to 4%,” President Trump said. “And I could see 5,000 to 10,000 pts more on the Dow. But that was a killer when they raised the rate. It was just a big mistake, and they admit to it. They admit to it. I was right. I don’t want to be right, but I was right.”
Trump has often slammed the Fed and its chairman Jerome Powell for raising rates that he claims came too quickly. Trump nominated Powell in November 2017; in 2018, the Fed raised rates four times.
The President also told Mr. Kernan that he is “so disappointed in Boeing,” and its issues with the 737 Max could have an impact of more than half a point on the nation’s GDP.
Trump called Boeing a “very disappointing company. This is one of the great companies of the world, let’s say as of a year ago, and then all of a sudden things happen. I am so disappointed in Boeing. It had a tremendous impact. You know, when you talk about growth, it’s so big that some people say it’s more than a half a point of GDP. So Boeing, a big, big disappointment to me. Big disappointment.”
National Economic Council director Larry Kudlow said on TV Tuesday that he predicts 3% GDP growth in Y 2020, and said that The Trump Years have resulted in a “mini upcycle” during which growth has gone from 1.5% to 2%.
“We had it going at almost 4%, then the Fed tightened,” said Mr. Kudlow.
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