Trump blasts US central bank again over rate hikes
WASHINGTON: US President Donald Trump renewed his attack on the US Federal Reserve’s monetary policy, blaming the central bank’s interest rate hikes for a tanking market.
With stocks on track for their worst December since the Great Depression, Trump has regularly berated the Fed for its stewardship of the economy.
“They’re raising rates too fast because they think the economy is so good,” Trump told reporters in a Q&A following his annual Christmas teleconference with US troops.
“But I think they will get it pretty soon,” added the president, who has dubbed the supposedly independent central bank “crazy” and “out of control.”
Trump’s comments came after Asian markets suffered a holiday rout on fears about the US economy and a government shutdown in Washington, now in its fourth day.
Closed on Monday for a national holiday, Tokyo plummeted at the open on Tuesday, suffering its worst finish since April 2017 after a brutal holiday-shortened session on Wall Street that saw US stocks sink for a fourth straight session.
Markets have been roiled by ongoing uncertainty in the United States, with Treasury Secretary Stephen Mnuchin berated for holding a call with the six biggest US banks and then reporting on Twitter that the six CEOs have ‘ample liquidity’ available.
Investors were also unnerved by weekend news reports that Trump had asked about the possibility of firing Federal Reserve Chairman Jerome Powell, accounts that Mnuchin said Trump has denied.
Trump last week called the Fed a greater economic threat to the United States than China, and on Monday compared the central bank to a sloppy golfer.
Asked by reporters whether he had confidence in Mnuchin, Trump answered “yes I do,” calling the treasury chief “very talented, very smart person.”
Trump said he also remained confident in American companies and urged investors to stay calm over the nose-diving markets. “I have great confidence in our companies. They’re doing very well,” he said. “I think it’s a tremendous opportunity to buy.”
The stock market malaise comes with Trump refusing to sign a budget bill to keep the government funded as he demands money for a US-Mexico border wall.
Stephen Innes, head of APAC trading at OANDA, said Trump’s spat with the Fed and Mnuchin’s call with the banks had “markets running for cover.”
Investors “have no confidence in the administration,” he told AFP. “Markets are driven by perception and it is flat-out bad.”