Trump pressures Fed over interest rates as central bank meets
President Donald Trump suggested Tuesday that if the Federal Reserve cut interest rates by one percentage point and resumed bond purchases it would boost the economy “like a rocket,” as central bank policy makers met to decide on where to set borrowing costs.
In a pair of tweets, Trump criticized the Fed for having “incessantly lifted interest rates” amid “wonderfully low inflation” in the U.S. He also praised China for adding “great stimulus” to its economy and keeping borrowing costs low.
Trump has long raged at the central bank and the chairman he appointed, Jerome Powell, over its 2018 rate increases and, more recently, the Fed’s plans to gradually shrink its portfolio of billions of dollars of Treasury bonds it acquired to fight the 2008 financial crisis. One solution, from the president’s point of view, is to appoint political loyalists to counterbalance Powell.
But the withdrawal of one pick — former pizza executive Herman Cain — from consideration for a seat on the Federal Reserve Board has intensified the scrutiny of his other controversial choice for the central bank, economics writer Stephen Moore. Moore has faced growing criticism — including from two key Republican senators — over his previous writing disparaging women and Midwest cities.
The Federal Open Market Committee is meeting Tuesday and Wednesday.