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Trump renews call for Fed to cut interest rates
WASHINGTON, April 6, 2019 (BSS/AFP) – President Donald Trump on Friday
greeted news of strong jobs growth with a fresh call on the US central bank
to cut interest rates and resume economic stimulus.
“I personally think the Fed should drop rates, I think they really slowed
us down,” he told reporters. “There’s no inflation.”
The Labor Department reported Friday that job growth had returned to
normal, adding 196,000 net new positions after a frighteningly weak result in
February.
Trump is not alone in criticizing the central bank, which bumped its
benchmark lending rates up by a quarter of a percentage point in December
despite signs the economy was slowing.
Policymakers have since cut their forecasts for 2019 to zero rate hikes
and repeatedly announced they will be “patient” before deciding to raise
rates again.
Trump however said this was not enough and called for the Fed not only to
cut rates but to re-start its post-financial crisis “quantitative easing”
program of buying bonds to add liquidity to the economy.
“You would see a rocket ship. Despite that, we’re doing very well,” he
said.
The US economy grew by about three percent in 2018 and is expected to fare
better than other advanced economies this year, growing by another two
percent, according to recent forecasts from the Fed and the International
Monetary Fund.
Trump’s public pressure on the Fed breaks with recent norms according to
which the White House has refrained from commenting on monetary policy.
He has also recently tapped loyalists with unconventional profiles to fill
two vacancies on the Fed’s board, perhaps giving his views greater weight in
policy decisions.
Stephen Moore, 59, a former economic adviser to Trump’s presidential
campaign known for highly criticized views on monetary policy, also faces
uncomfortable questions from lawmakers concerning unpaid income taxes and
penalties.
Herman Cain, 73, whose name Trump announced Thursday, once led a pizzeria
chain and has served on the board of the Kansas City Federal Reserve Bank.
He dropped out of the 2012 race for the Republican Party’s nomination for
that year’s presidential elections following accusations of sexual
harassment, which he denied.
BSS/AFP/HR/1010