Trump blasts Fed as ‘boneheads’
President Donald Trump on Wednesday blasted the Federal Reserve, saying in a name-calling tweet that the central bank should lower interest rates to zero or possibly even below zero.
The president posted consecutive tweets bashing the Fed and Fed Chairman Jerome Powell, saying the “bonehead” officials are missing “a once-ina-lifetime opportunity” to boost the economy with rate cuts.
“The USA should always be paying the lowest rate,” Trump said on Twitter. “No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing.”
American presidents typically have shied from criticizing the Fed or commenting publicly on monetary policy decisions for fear of rattling investors or being seen as exerting undue influence. But Trump has bucked convention, choosing to air his grievances.
The president’s tweets come amid concern in some quarters about the prospect of a recession, though few economists expect an immediate downturn.
“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” Trump said on Twitter. “INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term.”
Trump said it would be doable because of the country’s “great currency, power, and balance sheet.”
Powell has declined to directly address Trump’s taunts.
”We’re completely and totally focused on our jobs,” he said last week.
The Fed in July lowered interest rates for the first time in a decade and concluded its meeting in Jackson Hole, Wyoming, “at a crossroads” with the possibility of another cut up in the air, according to an analysis by George Rusnak, co-head of global fixed income strategy at Wells Fargo Investment Institute. He predicted two more quarter-point cuts by year’s end.
“The Fed’s Jackson Hole symposium reflected disparate views, as Chair Powell’s speech signaled an accommodative stance, while some Fed officials voiced a reluctance to make additional rate cuts,” Rusnak wrote in a Sept. 3 analysis.