Trump: ‘Very Disruptive’ Fed Made ‘Big Mistake’ With December Rate Hike
President Donald Trump on criticized Federal Reserve policies as “destructive” for not lowering interest rates.
Trump, who has accused the U.S. central bank of undercutting his efforts to boost economic growth, has repeatedly said on Twitter the Fed should cut its key overnight lending rate by a full percentage point and renew the quantitative easing program that saw it pump trillions of dollars into the economy in response to the 2007-2009 financial crisis and recession.
The Fed raised rates four times last year, lifting its policy rate to a range of 2.25 percent to 2.50 percent. After its last rate hike in December, the Fed faced particularly sharp criticism from Trump, Reuters explained.
Some central bank policymakers have cited ongoing weak inflation, still well below the Fed’s 2 percent target, as a sign rates may be too high.
Trump on Monday told CNBC the central bank’s antics have given the Chinese an upper hand in trade negotiations.
“They devalue their currency, they have for years: It’s put them at a tremendous competitive advantage. And we don’t have that advantage because we have a Fed that doesn’t lower interest rates,” Trump told CNBC.
“We should be entitled to have a fair playing field, but even without a fair playing filed – because our Fed is very, very disruptive to us – even without a fair playing field we are winning,” he said.
“Don’t forget: the head of the Fed in China is President Xi … he can do whatever he wants,” Trump said.
“It’s more than just Jay Powell – we have people on the Fed that really weren’t – they’re not my people. But they certainly didn’t listen to me because they made a big mistake: They raised interest rates far too fast,” Trump told CNBC.
“That’s No. 1,” Trump said.
“No.2: they did quantitative tightening: They were taking in $50 billion a month. Fifty billion a month. And they’ve now eased that, but it’s still $25 billion a month, which is ridiculous. Now, China’s doing just the opposite. They’re pumping money in. So I’m winning, but I’m not winning on a level table,” he said.
In a wide-ranging interview, Trump also said: