Earlier, the president alleged that the US Federal Reserve, not China, was the biggest hurdle to a US victory in the US-Chinese trade spat.
The Federal Reserve’s monetary policy is keeping the US dollar too strong and making it difficult for US companies to compete globally, President Donald Trump has alleged in a fresh batch of tweets.
According to the president, on a “level playing field,” US companies, “the greatest companies in the world,” would outcompete anyone. Unfortunately, Trump suggested, absent “substantial Fed Cuts…and no quantitative tightening,” this will not be possible.
Continuing Wednesday’s thrashing of the Fed for its alleged timidness in cutting the interest rate, Trump accused the regulator of “call[ing] it wrong at every step of the way” in his trade conflict with China and other countries. “Can you imagine what would happen if they actually called it right?” Trump asked.
On Wednesday, in response to the recent 25 basis point interest rate cut to a base range of 2-2.25 percent, Trump urged Federal Reserve Chairman Jerome Powell to cut interest rates “bigger and faster, and stop their ridiculous quantitative tightening NOW.”
Last week’s rate cut was the first since the 2008 financial crisis, when rates were slashed to zero.
The White House has aggressively lobbied for more substantive cuts in interest rates as a way to encourage borrowing and investment to stimulate economic growth. President Trump and his advisors have also repeatedly alleged that the current interest rates were responsible for the dollar’s strength against other currencies, and that this harmed US exports.
Trump’s opponents have warned against overly low interest rates, citing the risk of inflation and reduced real purchasing power, and the possible concentration of wealth in non-productive sectors of the economy.
Created in 1913 as an independent central bank separate from the federal government, the Federal Reserve does not have to adhere to the policy demands of the sitting president. In June, Bloomberg reported that President Trump had asked White House officials to explore options about how to replace Fed chair Powell, with Powell saying he planned to serve out his term until 2022, and would not resign if Trump asked him to.
Earlier this week, as part of his ongoing multi-trillion dollar trade war with China, President Trump accused Bejing of engaging in “currency manipulation” to improve the attractiveness of its exports by artificially lowering the value of its yuan. Beijing blasted the claims, accusing Trump of getting the facts wrong, and saying the allegations would “bring turmoil to the financial market” and damage the global economy.