President Trump is Not Demanding a Monetary Policy Change at the Fed
Wednesday, White House economic advisor Larry Kudlow said that US President Trump was not demanding a policy change at the Fed.
President Trump heaped more criticism on the Fed Tuesday, calling rising US interest rates his “biggest threat.”
The Trump Administration official said that President Trump actually largely agreed with the Fed.
“He is not interfering with their independence,” Mr. Kudlow said Wednesday morning on TV.
“He is not going over there to tell them to change their plans or their strategy.”
The Fed hawks have settled into a gradual policy of raising its policy interest rate that began slowly in late Y 2015, and is expected to raise rates again in December and in Y 2019.
Over the past 20 years, Presidents have been reticent to criticize because Fed independence is seen as important for economic stability.
But Tuesday, President Trump said he was “not happy with what” Chairman Powell is doing. “Let me use a nice term: he’s being extremely conservative”aka Hawkish, not Dovish.
“My biggest threat is the Fed because the Fed is raising rates too fast,” President Trump said. “I put a couple of other people there I’m not so happy with too, but for the most part I’m very happy with people.”
President Trump added he is not trying to oust or blame Chairman Powell, whom he appointed to replace former Chairwoman Janet Yellen.
The Fed independently makes policy decisions but regularly reports to Congress. Recent data has been in line with its portrait of a strong economy that has a “remarkably positive” outlook, Chairman Powell said on 2 October.
Fed officials have generally not directly responded to President Trump, though Chicago Fed President told a Flint, Michigan audience last week it was “unusual” for a President but “fair” to question how much to raise rates.