Growing debate over Federal Reserve's impact on GDP growth
President Trump took a veiled swipe at the Federal Reserve by suggesting the gross domestic product report would have been better had the Fed not lowered interest rates.
“If we had kept the same interest rates and the same quantitative easing that the previous administration had, that 3.2% would have been much higher than that,” Trump said during remarks to the NRA convention Friday.
Bankrate senior economic analyst Mark Hamrick told FOX Business he is confused by the president's comments given his actions regarding leadership at the Fed.
“Trump is the one who asked Janet Yellen effectively to leave and he is the one who nominated Jerome Powell," Hamrick during an interview on “Cavuto: Coast-to Coast.”
But Hamrick said he doesn't dismiss the possibility that GDP growth figures could have been higher had the Federal Reserve kept interest rates lower. The GDP topped what most analysts’ expected rising at a 3.2 percent annualized rate, beating according to data released Friday by the Commerce Department.
Hamrick said the GDP numbers may not change the reality for people who have yet to benefit from the rapid growth of the U.S. economy, an issue he says will impact the 2020 presidential election.
“The rhetorical question here is, how many people are undecided on the strength of the U.S. economy at this moment? I think the other issues that are going to define these questions or issues at the ballot box effectively are not always going to go to 'am I better off now than I was 4 years ago?,’” he said.
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A recent Bankrate survey found nearly half (44 percent) of the 1,000 individuals surveyed said the political environment in Washington, D.C. is the biggest threat to the domestic economy over the next six months — more than any other category and the highest since Bankrate started asking the question two years ago.