WASHINGTON, May 1 — President Donald Trump slammed the Federal Reserve yesterday for “incessantly” raising interest rates and said cutting rates by a full point would make the economy surge.
In a Twitter outburst on the first day of a two-day central bank meeting to decide the course of monetary policy, Trump said, “We have the potential to go up like a rocket if we did some lowering of rates, like one point.”
He said China is boosting its economy by keeping rates low, but “Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low.”
The Fed has not raised the key rate this year and in fact signalled clearly that it will hold off on any further moves while it evaluates the US economy and is widely expected to stand firm in its decision today.
The central bank has tightened policy nine times since December 2015, moving from zero in the aftermath of the global financial crisis to the current range of 2.25 per cent to 2.5 per cent.
Trump has repeatedly ignored norms designed to protect the Fed’s independence from political influence, which could undermine its credibility, although other White House officials have been more cautious.
“Yes, we are doing very well at 3.2% (first quarter) GDP, but with our wonderfully low inflation, we could be setting major records & at the same time make our National Debt start to look small!” Trump tweeted.
Trump and his economic team have promised that tax cuts and deregulation will accelerate economic growth to 3 or even 4 per cent but economists say that is unlikely, especially as the US trade war with China and others has dampened business confidence and investment. — AFP