Trump slams Powell and Fed ahead of meeting, calls for 'big' rate cut
President Trump renewed his criticism of the Federal Reserve ahead of the central bank’s Federal Open Market Committee meetings Tuesday and Wednesday.
Fed Chairman Jerome Powell and his colleagues “don’t have a clue,” Trump tweeted Monday morning. He said he wants to see a “big” drop in interest rates.
“Producer prices in China shrank most in 3 years due to China’s big devaluation of their currency, coupled with monetary stimulus. Federal Reserve not watching?” Trump wrote on Twitter. “Will Fed ever get into the game? Dollar strongest EVER! Really bad for exports. No Inflation...Highest Interest Rates.”
The Fed is expected to announce a rate cut Tuesday at 2 p.m. EST after the meetings.
FILE - This Feb. 5, 2018, file photo shows the seal of the Board of Governors of the United States Federal Reserve System in the ground at the Marriner S. Eccles Federal Reserve Board Building in Washington. (AP Photo/Andrew Harnik, File)
“The United States, because of the Federal Reserve, is paying a MUCH higher Interest Rate than other competing countries,” he continued. “They can’t believe how lucky they are that Jay Powell & the Fed don’t have a clue. And now, on top of it all, the Oil hit. Big Interest Rate Drop, Stimulus!”
Last week, Trump called for zero or negative interest rates, which the European Central Bank announced in a new round of stimulus.
The U.S. central bank lowered the benchmark federal funds rate in July for the first time in nearly a decade, citing “global developments in the economic outlook as well as muted inflation pressures." At the time, Fed officials did not say whether they anticipated additional cuts, but warned it was not the beginning of an aggressive rate-cutting series.
Since then, however, global economic conditions have significantly weakened: Manufacturing contracted in the U.S. for the first time in three years; the spread between two-year and 10-year Treasury yields inverted, a common harbinger of an impending recession; and employment data in the U.S. suggested the labor market is softening, all amid heightened trade tensions between the U.S. and China.
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FOX Business' Megan Henney contributed to this report.