Trump slams Fed, says trade war forced China to use stimulus plan
Hours after Federal Reserve Chairman Jerome Powell said he did not see the U.S. sliding into a recession despite uncertainty surrounding the U.S.-China trade war with China, President Trump had a few words for Twitter followers about China’s economic strategy.
In a late-night tweet, Trump claimed that Beijing needed to stimulate its economy because of the U.S. tariffs on more than $350 billion worth of Chinese goods, but once again slammed the U.S. central bank saying it “does NOTHING!”
“China just enacted a major stimulus plan. With all the Tariffs THEY are paying to the USA, Billions and Billions of Dollars, they need it! In the meantime, our Federal Reserve sits back and does NOTHING!” he wrote in the tweet.
The People’s Bank of China Friday, in a statement on its website, said it would cut the amount of cash that banks are required to hold in reserve. The shift pivots the country to the lowest level of capital reserves since 2007.
China’s stimulus package is estimated to bring an added $126 billion in available loans to kick-start growth.
Powell on Friday, while speaking in Zurich, Switzerland, said he “wouldn’t see the recession as the most likely outcome in the U.S.”
“The most likely outlook is still moderate growth, a strong labor market and inflation continuing to move back up," he said.
When asked if he felt whether politics influenced decisions by the U.S. central bank, he was emphatic.
“Political factors play absolutely no role in our process, and my colleagues and I would not tolerate any attempt to include them in our decision-making or our discussions," he said.
Trump has often criticized Powell for stifling economic growth by raising interest rates in 2018.
In July, Fed policymakers cut interest rates for the first time since the financial crisis. They are expected to lower rates by another 25 basis points during their upcoming meeting on Sept. 18.