National Post (National Edition)
Trump’s wish for Fed intervention
AS FEARS OF RECESSION RISE, PRESIDENT CHASTISES FED CHAIR
(Reduce rates) over a fairly short period of time... by at least 100 basis points, with perhaps some quantitative
easing as well.
WA SHI NGT ON • President Donald Trump on Monday sought to play down the risk of a recession while also pinning the blame for a potential economic downturn on the Federal Reserve, chastising the central bank’s chairman, Jerome Powell, for a “horrendous lack of vision.”
In a tweet, Trump also called for the Fed to reduce interest rates by at least 100 basis points, marking an escalation of his demands on the central bank. Trump has frequently lashed out at Powell but had never used the phrase “basis points” in a tweet or made such a specific demand.
“Our Economy is very strong, despite the horrendous lack of vision by Jay Powell and the Fed, but the Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election,” Trump tweeted. “Very Selfish! Our dollar is so strong that it is sadly hurting other parts of the world.”
He then declared that interest rates, “over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well.”
“If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!” he said.
The Fed funds rate, which Trump is trying to tell central bankers to cut, is currently set at 2.25 per cent. Slashing it 100 basis points would lower this rate to 1.25 per cent, giving them very little additional wiggle room to maneuver if a full-fledged recession began.
Boston Federal Reserve Bank President Eric Rosengren on Monday signaled no willingness to support further interest rate cuts, saying that U.S. economic conditions are still good and that easing policy could encourage a worrying debt build-up.