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Trump: Fed should get US interest rate ‘down to ZERO, or less’
WASHINGTON, Sept 11, 2019 (BSS/AFP) – President Donald Trump wants US
“interest rates down to ZERO, or less,” he tweeted Wednesday amid widespread
expectations that the Federal Reserve will cut rates later this month.
“We should then start to refinance our debt. INTEREST COST COULD BE BROUGHT
WAY DOWN, while at the same time substantially lengthening the term,” he
added.
“It is only the naivete of Jay Powell and the Federal Reserve that doesn’t
allow us to do what other countries are already doing. A once in a lifetime
opportunity that we are missing because of ‘Boneheads.'”
As it becomes increasingly apparent that the US economy has slowed in 2019,
Trump has publicly berated Fed chair Jerome Powell and the central bank for
failing to loosen monetary policy fast enough.
Investors overwhelmingly expect the Fed to deliver a 25-basis-point cut to
interest rates as the global economy slows and the US-China trade war drags
into its second year.
The Fed cut the benchmark interest rate in July for the first time in more
than a decade, partly as insurance against the impact of trade uncertainties
on the economy.
Powell has vowed to act to ensure that American economic expansion
continues, but warned the central bank has no “rulebook” for dealing with the
US-China trade war.
“We have the great currency, power, and balance sheet,” Trump said in
announcing that the “Federal Reserve should get our interest rates down to
ZERO, or less.”
While the Fed is not expecting a recession, trade frictions — as well as
slower global growth and persistently low inflation — are among the
“significant risks” that policy makers are watching, the Fed chair said
during a conversation at the University of Zurich on Friday.
The US economic landscape has shifted this year, as business investment has
weakened noticeably, manufacturing has fallen into decline and job creation
has slowed.
The Fed chair noted, however, that unemployment had remained near historic
lows for about 18 months while wages were rising, fueling consumer spending.
Powell, whom Trump promoted to Fed chairman last year, has come under
repeated attacks from the president but has reiterated that he and his Fed
colleagues ignore such comments when they set monetary policy.
BSS/AFP/SR/1800 HRS