‘Faulty thought process’: Trump lashes out at Fed – again
US President Donald Trump renewed his attack on the Federal Reserve today, saying it is due to a “faulty thought process” that it has higher interest rates than other major central banks.
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Trump has long been a vocal opponent of Fed policy which he thinks is hurting the US economy. He has said the growth would “rocket” if rates were lowered, which would increase borrowing and spending.
On Twitter today Trump said: “We pay much higher interest rates than countries that are no match for us economically. In other words, our interest costs are much higher than other countries, when they should be lower. Correct!”
In a subsequent tweet he said if the Fed had not raised rates from 2016 onwards “we would be doing even better than we are doing right now”.
“This is our chance to build unparalleled wealth and success for the U.S., GROWTH, which would greatly reduce % debt. Don’t blow it!”
Recent statements from senior Fed policymakers have led markets to expect an interest rate cut this month.
Yesterday New York Fed president John Williams excited markets by saying: “It’s better to take preventative measures than to wait for disaster to unfold.”
US stock markets hit record highs and the dollar has been falling since Fed chair Jay Powell’s gloomy congressional testimony last week.
He said “trade tensions and concerns about global growth have been weighing on economic activity and the outlook” in the US.
Yet Trump has remained a vocal critic of the Fed’s decision to raise rates from 0.5 per cent in early 2016 to between 2.25 and 2.5 per cent at the end of 2018, where they have since stood.
Last month he accused European Central Bank (ECB) president Mario Draghi of deliberately devaluing the euro to make the Eurozone more competitive by signalling that he could relaunch stimulus measures.
“Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA.
Read more: US stock markets hit record high as Fed chair hints at rate cuts
“They have been getting away with this for years, along with China and others,” he said in a tweet.