Over the last year, President Donald Trump has amped up his criticism of the Federal Reserve via his favorite megaphone: his Twitter account. His public berating of the central bank began only two months after his own nominee, Jerome Powell, became Fed chairman in February of 2018 and has only escalated since then.
Based on a Yahoo Finance analysis of tweets mined through the Trump Twitter archive as of July 28, Trump appears to have tweeted about the Fed or monetary policy decisions 39 times since nominating Jerome Powell to the head of the central bank (42 when counting the three repeat tweets that were deleted due to typos).
Heading into the Fed’s next policy-setting meeting on July 31, Trump has ramped up his central bank bashing to new levels, tweeting 20 times since the Fed’s last policy-setting meeting on June 19. For comparison, between the May 1 and June 19 meetings, Trump tweeted about the Fed only five times.
Q2 GDP Up 2.1% Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck. Almost no inflation. USA is set to Zoom!— Donald J. Trump (@realDonaldTrump) July 26, 2019
The publicity of Trump’s stream of thought, aired out on Twitter, is a stark contrast to the tight protocol on communications at the Federal Reserve system. Whereas Trump can tweet whenever he would like (his latest Fed-related musing was at 11:24 p.m. EST), Fed speakers have limits on when they can and cannot make public remarks. For the eleven days leading into a Federal Open Market Committee meeting, Fed officials are not permitted to speak, a timeframe referred to as a “Fed blackout.”
About a third of Trump’s tweets were fired off during Fed blackout periods.
‘Don’t miss it again’
For his part, Powell has reiterated that the Fed’s monetary policy decisions have been driven by fair assessments of economic conditions, responding to Trump’s criticism by saying the Fed is insulated from executive branch pressure and that the president does not have the authority to fire him.
But the Fed could end up delivering on a rate cut — the first in more than 10 years — as soon as Wednesday.
Until March of this year, the Fed did not appear to signal a significant leaning toward a rate cut. But in the June 19 meeting where the Fed kept rates steady, the Fed cited trade concerns, a global slowdown, and downward pressures on inflation as possible reasons for a rate cut in the future.
Markets are betting on that cut to happen on July 31. Fed funds futures markets are pricing in a 100% chance of some rate cut on Wednesday, with a majority of bets on a 25 basis point cut.
Trump’s tweets are piling on market expectations for a cut.
“Don’t miss it again!” Trump tweeted on July 22, a follow-up to an earlier tweet after the June meeting saying that the Fed “Blew it!” by not raising rates in its last meeting.
Dinner didn’t do much
Trump’s colorful language has been a fixture of his tweets since he began bashing the Fed last year amid its hiking cycle.
In 2018, the Powell-led Fed raised rates four times and continued the process of unwinding its multi-trillion dollar balance sheet of assets that it accumulated to battle the financial crisis.
Trump, unhappy with higher rates potentially constraining lending and business activity at large, lashed out at the Fed leading into the last FOMC meeting of 2018, warning that the Fed needed to “feel the market” and stop raising rates. Trump then jabbed: “Good luck!”
The committee ended up raising rates by 25 basis points in the December 19 meeting.
Trump fumed over the decision, but in private. Bloomberg reported two days after the meeting that Trump had discussed firing Powell.
The day after, Treasury Secretary Steven Mnuchin attempted to clear the record by saying Trump had directly told him that he was not trying to fire the Fed chair. Mnuchin posted those remarks on Twitter.
Heading into the January 30 FOMC meeting, Trump tweeted only twice about the Fed.
Tensions appeared to ease when the president met with Powell, Mnuchin, and Fed Vice Chairman Richard Clarida over dinner in early February.
But after the Fed kept rates steady in March, Trump came up with a new way to muscle the Fed: nominating former Trump adviser Stephen Moore and former pizza CEO and presidential candidate Herman Cain to the board.
Both were heavily criticized for their close ties to Trump; Cain ultimately bowed out citing low pay, and Moore withdrew his nomination shortly after his controversial writings about women resurfaced.
Trump then turned back to Twitter, posting seven tweets before the May 1 meeting saying that the economy would be “up like a rocket” if the Fed had eased policy.
The Fed did not move in its May meeting either. Heading into the Fed’s June 19 meeting, Trump called the central bank a “stubborn child.”
Asked about political pressure, Powell said in June that the Fed’s independence is “an important institutional feature that has served both the economy and the country well.”
All eyes will be on the Fed in its Wednesday announcement, but attention could shift quickly to the president’s twitter account shortly after.
Trump’s monetary policy-related tweets since placing Powell at the Fed are archived below:
Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him on Twitter @bcheungz.