President Trump, “not trilled” with Fed’s Raising Interest Rates
Monday, US President Donald Trump said he is “not thrilled” with Fed Chairman Jerome Powell for raising interest rates, plus he accused China and Europe of manipulating their respective currencies.
President Trump rattled investors in July when he criticized the Fed’s monetary policy tightening, told Reuters in an interview that he believed the Fed should be more accommodating.
“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” President Trump said in the interview, referring to Powell.
President Trump then nominated Powell to replace former Fed Chair Janet Yellen.
American Presidents have rarely criticized the Fed in recent decades because the independence of the Fed is seen as important for economic stability.
After that interview US stocks backed off of their highs, and USD edged down against a basket of currencies.
President Trump also criticized the Fed as a candidate for President in Y 2016, said other countries benefited from their central banks’ moves during tough trade talks, but the United States was not getting support from the Fed.
“We’re negotiating very powerfully and strongly with other nations. We are going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” President Trump said.
The Fed has raised rates 2X this year and is expected to do so again next month. Let’s see if it does now.
“I think China’s manipulating their currency, absolutely. And I think the Euro is being manipulated also,” President Trump said.
Trump has made reducing U.S. trade deficits a priority and the combination of rising interest rates and a strengthening dollar pose risks for export growth.
Asked Monday if he believed in the Fed’s independence, President Trump said: “I believe in the Fed doing what’s good for the country.”
“Am I happy with my choice?” President Trump said to Reuters about Powell. “I’ll let you know in 7 years.”