Trump calls on Federal Reserve to make ‘substantial’ rate cuts

WASHINGTON — U.S. President Donald Trump is not letting up on his attacks on the Federal Reserve, calling for “substantial” Fed rate cuts to allow the dollar to fall in value against foreign currencies.

In a series of tweets on Thursday, Trump said, “As your president, one would think that I would be thrilled with our very strong dollar. I am not!”

Trump said the Fed’s high level of interest rates in comparison to other countries was keeping the dollar too strong and making it more difficult for U.S. manufacturers to compete.

The Fed reduced its key policy rate by a quarter-point last week, but Trump wants more rate cuts. They can lower the dollar’s value against other currencies, although other factors are also at play.

The dollar’s value is affected not only by relative interest rates in the U.S. compared to other countries, but also economic growth rates and foreigners’ investment opportunities. While the U.S. economy is slowing, it is still performing better than most other major economies.

“With substantial Fed cuts, (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition,” Trump tweeted.

Economists believe the possibility of future rate hikes has gone up sharply since Trump last week threatened to impose more tariffs on Chinese products by Sept. 1, widening a trade war between the world’s two biggest economies.

Four former Fed leaders — Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen — said in an opinion piece in the Wall Street Journal on Tuesday that the Fed’s political independence must be protected, and called it wrong to threaten to remove or demote Fed leaders, as Trump has done.