Trump Demands Fed Help on Economy, Complains About Interest Rate Rises – By Reuters (newsmax.com) / Aug 20 2018
U.S. President Donald Trump said on Monday he was “not thrilled” with the Federal Reserve under Chairman Jerome Powell for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.
In the middle of international trade disputes, Trump in an interview with Reuters also accused China and Europe of manipulating their respective currencies.
American presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability. Trump has departed from this past practice.
The president spooked investors in July when he criticized the U.S. central bank’s over tightening monetary policy. On Monday he said the Fed should be more accommodating on interest rates.
“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said, referring to Powell. Trump nominated Powell last year to replace former Fed Chair Janet Yellen.
U.S. stock prices dipped after Trump’s comments to Reuters and the U.S. dollar edged down against a basket of currencies.
Trump, who criticized the Fed when he was a candidate, 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’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said.
The Fed has raised interest rates twice this year and is expected to do so again next month with consumer price inflation rising to 2.9 percent in July, its highest level in six years, and unemployment at 3.9 percent, the lowest level in about 20 years.
After leaving its policy interest rates at historic lows for about six years after the 2008 global financial crisis, the Fed began slowly raising rates again in late 2015.
Trump said China was manipulating its yuan currency to make up for having to pay tariffs on imports imposed by Washington. “I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” Trump said.
“What they’re doing is making up for the fact that they’re now paying … hundreds of millions of dollars and in some cases billions of dollars into the United States Treasury. And so they’re being accommodated and I’m not. And I’ll still win.”
Trump has frequently accused China of manipulating its currency, but his administration has so far declined to name China formally as a currency manipulator in a semi-annual report from the U.S. Treasury Department.
The U.S. dollar has strengthened this year by 5.35 percent against the yuan, reversing most of its large drop against the Chinese currency in 2017.
The euro is off by about 4.3 percent against the greenback this year, beset by concerns over the pace of economic growth in the EU trading bloc and over U.S.-European trade tensions.
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.
A Fed spokesman declined to comment on Trump’s remarks on Monday.
Powell last month said in an interview that the Fed has a “long tradition” of independence from political concerns, and that no one in the Trump administration had said anything to him that gave him concerns on that front.
“We’re going to do our business in a way that’s strictly nonpolitical, without taking political issues into consideration, and that carries out the mandate Congress has given us,” he said.
Asked if he believed in the Fed’s independence, Trump said: “I believe in the Fed doing what’s good for the country.”
Powell took over as Fed chief earlier this year.
“Am I happy with my choice?” Trump said to Reuters about Powell. “I’ll let you know in seven years.”
