As the Federal Reserve tightens monetary policy with its steady pace of interest rate hikes, President Donald Trump continues to criticize the central bank.
“I think the Fed has gone crazy,” President Donald Trump said. Trump made the remarks after stepping off Air Force One in Erie, Pennsylvania, where he is due to hold a “Make America Great Again” rally.
Experts attribute at least some of the decline to the recent rapid rise in Treasury yields.
“I think the Fed is making a mistake,” Trump said according to CNBC. “They are so tight.”
As far as the market selloff itself is concerned, Trump didn’t seem too surprised.
“It’s a correction that we’ve been waiting for for a long time,” he said. “But I really disagree with what the Fed is doing.”
Trump’s criticism of the Fed is not new
Just a day earlier, Trump said he did not like the Fed’s path on monetary policy, criticizing the central bank for moving too quickly with interest rate increases.
“I think we don’t have to go as fast,” Trump reportedly said. “I like low interest rates.”
In September, the Fed raised interest rates by 25 basis points for the third time in 2018, raising the target range for its benchmark rate to 2%-2.25%.
At the time, Trump bashed the rate hike, adding that he would “rather pay down debt or do other things.”
The Fed, which is statutorily independent of the executive branch, has not faced significant political pressure in many decades, although the Richard Nixon administration is on record as having a heavy hand over the Arthur Burns-run Fed in the 1970s.
Fed Chair Jerome Powell has long maintained that the central bank needs to remain independent from political pressure in order to see its dual mandate through.
“We must not forget the lessons of the past, when a lack of central bank independence led to episodes of runaway inflation and subsequent economic contractions,” Powell said at a central banking conference in May.
Brian Cheung is a reporter at Yahoo Finance. Follow him on Twitter @bcheungz