President Trump targeted the U.S. Federal Reserve Wednesday morning and continued to call on the central bank to make rate cuts “bigger and faster.”
“Our problem is a Federal Reserve that is too proud to admit their mistake of acting too fast and tightening too much (and that I was right!),” Trump wrote in a tweet. “They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW. Yield curve is at too wide a margin, and no inflation!”
Trump added that the central bank doesn’t understand the global competition facing the U.S.
“It would be much easier if the Fed understood, which they don’t, that we are competing against other countries, all of whom want to do well at our expense!” Trump tweeted.
Two surprise interest rate cuts overnight caught investor attention, raising concerns about global economic conditions.
New Zealand's central bank cut its official cash rate 50 basis points to a record low of 1 percent, which was larger than expected.
The Bank of Thailand followed suit, cutting its one-day repurchase rate by 25 basis points to 1.5 percent.
The Fed cut interest rates late last month for the first time in more than a decade, citing “implications of global developments for the economic outlook as well as muted inflation pressures.” While Trump, at the time, had called for a large rate cut, the central bank lowered the federal funds rate by just a modest quarter point to a range of between 2 percent and 2.25 percent.
“We also feel like weak global growth and trade tensions are having an effect on the U.S. economy,” Federal Reserve Chairman Jerome Powell said at a press conference last week after announcing the rate cut. “You see it now, in the second quarter – you see weak investment; you see weak manufacturing.”
And, despite the decision to lower rates, Trump was still displeased and renewed his attacks on the Fed and its chairman, Jerome Powell.
“As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place - no inflation,” the president tweeted after the central bank announced the cut. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”
Members of the Trump administration have also criticized Powell’s performance as the leader of the Fed (a position he has held since early 2018 after being nominated by the president), blaming him for hurting U.S. economic growth.
“Jay Powell is singularly responsible for losing at least a point of growth on GDP by raising interest rates by 100 basis points and engaging in what’s called quantitative tightening,” White House trade adviser Peter Navarro told “Fox News Sunday” last Sunday, adding that the central bank is the “single greatest obstacle right now to strong growth in America.”