Fed must cut rates bigger and faster: Trump

WASHINGTON: US President Donald Trump yesterday continued to hammer the Federal Reserve, demanding more stimulus to boost the economy as the 2020 elections approach. And as Wall Street looked set to tumble on economic fears, which sent bond yields tumbling in Europe and the US, Trump said the Fed, not China, is America’s main economic obstacle.

“They must cut rates bigger and faster and stop their ridiculous quantitative tightening NOW,” he said on Twitter, just a week after the US central bank cut the benchmark lending rate for the first time in more than a decade. Stock futures suggested Wall Street was due to resume this week’s sell-off as Trump’s trade war with China worsened. Yields on 10-year Treasuries fell sharply as investors moved away from riskier assets in a sign of mounting fears the economy could be slowing. Earlier Germany reported industrial production had fallen much more than expected in June, with declines across the board in capital, consumer and producer goods, heightening fears of a recession in Europe’s largest economy and sending government bond yields to record lows.

The uncertainty generated by the trade war an concerns about a slowing global economy prompted the Fed to cut interest rates last week. But a key central bank policymaker, St. Louis Federal Reserve Bank President James Bullard, told AFP on Tuesday that benchmark US lending rates were “in the right neighborhood,” suggesting he may be disinclined to cut rates as fast and as far as Trump wanted.