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Trump Calls on Fed to Do a 'Big' Rate Cut

EconomyAug 21, 2019 09:55AM ET
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Investing.com - U.S. President Donald Trump sent yet another shot across the Federal Reserve’s bow on Wednesday, calling on it for a "BIG CUT" in interest rates just two days ahead of a hotly-anticipated appearance by Chairman Jerome Powell at the Fed's Economic Symposium in Jackson Hole.

“The only problem we have is Jay Powell and the Fed,” he said. “Big U.S. growth if he does the right thing: BIG CUT, but don’t count on him!”

Trump accused the Fed of getting its policy wrong, complaining that "have a far lower interest rate, and we should be lower than them."

He said growth was being hurt by what he inaccurately claimed was “highest dollar in U.S. history”. The dollar index, which tracks the greenback against a basket of developed-market peers, is currently at 98.06 - below when he was elected and some 20% below its last major peak in 2002. It's also only 3% higher against the Chinese yuan than it was a decade ago, despite a decade of Chinese inflation running much higher than U.S. inflation.

Trump has repeatedly called for looser monetary policy amid signs that the economy may be slowing as the impact of his 2017 tax cut fades. Gross domestic product growth slowed to an annualized rate of only 2.1% in the second quarter, its slowest in two years.

Fed officials have repeatedly insisted that the central bank is independent and will not respond to political pressure.

Even so, the central bank pulled an about face in July and cut interest rates for the first time in a decade, pointing to the uncertain economic outlook, citing the ongoing trade conflict with China and subdued inflation. It angered Trump by labeling the cut as a "mid-cycle adjustment" rather than the start of a series of rate cuts. Two of its policy-makers voted against the measure, arguing that the economy is still robust.

Trump's latest tweets came ahead of the release of the minutes from that July policy decision at 2:00 PM ET (18:00 GMT) and a scheduled speech from Powell on Friday at Jackson Hole.

Markets expect the Fed to cut by another 25 basis points at its next meeting in September. Trump, however, has called for a reduction of a full percentage point and suggested that further quantitative easing could be a good idea.

Trump had opposed the quantitative easing policy of former Fed chair Ben Bernanke while Barack Obama was still President.

Trump Calls on Fed to Do a 'Big' Rate Cut
 

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Comments (10)
Tom OKray
Tom OKray Aug 21, 2019 4:15PM ET
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Inflation is on the rise give him a rate increase.
Lion King
Lion King Aug 21, 2019 1:18PM ET
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US have alote of Americans enemy like the Democrats and this Fed . who just help other countries while they hurt America
Diteboho Mabaso
Diteboho Mabaso Aug 21, 2019 10:53AM ET
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so how do u thing the fomc statement is gna ****out? hight be positive
David David
David9 Aug 21, 2019 10:20AM ET
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We are already in recession but we just don't know it yet. If not, then why is he wanting to do big rate cut and tax cut? We are heading into a deep recession if he can't get the China deal done soon.
Shane Hacker
Shane Hacker Aug 21, 2019 9:57AM ET
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Just trying to get a temp numbers boost that will be bad for most Americans in the end. Such a child. if it wasnt for his rich daddy he would be working at McDonalds.
Nick Nick
Nick Nick Aug 21, 2019 9:57AM ET
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No so sure about his job at McDonald. You have to be fit mentally
Tom OKray
Tom OKray Aug 21, 2019 9:56AM ET
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Trump double talk says no whereclose to recession, economy, jobs doing great but still demands rate cut. Only wants it to make himself look good
Brad Dover
Brad Dover Aug 21, 2019 9:55AM ET
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trump is worthless and has severe mental problems
Peter Mold
SirDoom Aug 21, 2019 9:21AM ET
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The inflation has been increaing this quarter and core cci above 2%. Lets see if FED is peofessional or react to PROUS preassure. If the last its mostly concerning.Hi public and private and FED debt will boomerang back
Antonio Velardo
Antonio Velardo Aug 21, 2019 9:16AM ET
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Every time T complains about the FED they do the opposite.
T Todd
T Todd Aug 21, 2019 9:11AM ET
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T is just trying to win the vote and he doesn't really care about the stability of economy in long term, AT ALL.
 
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