Trump says Fed is ‘out of control’

President Donald Trump speaks during a rally in Erie, PennsylvaniaImage copyright AFP

US President Donald Trump has renewed his attacks on the central bank, the Federal Reserve, calling it “out of control” and “far too stringent”.

Mr Trump said he was not going to fire Fed chairman Jay Powell, but was just “disappointed” in the bank’s policies.

His criticisms came during remarks at the White House. Earlier, he told Fox News the Fed was being “too aggressive” by raising interest rates this year and getting “a little bit too cute”.

He said it was “making a big mistake”.

“I’m paying interest at a high rate because of our Fed,” he added, referring to the cost of servicing the US deficit.

On Wednesday, Mr Trump said the Fed had “gone crazy”, prompting a response from International Monetary Fund head Christine Lagarde, who said she “would not associate” Mr Powell “with craziness”.

Mr Trump’s comments follow several days of declines in US stock markets.

White House officials, including Mr Trump, have dismissed the declines as standard corrections after a long run of rising share prices.

But a fall would be a concern to the president, who frequently cites stock market performance as a sign of his administration’s success.

‘Lived too well’

On Thursday morning, Mr Trump was interviewed by telephone on the Fox & Friends programme.

As well as criticising the Fed, Mr Trump said his trade policies had hurt China’s economy.

He went on: “I put $250bn worth of taxes, or tariffs, on China and it’s had a big impact. If you look at their economy now, it’s a whole different ball game.

“Their economy has gone down very substantially. And I have a lot more to do if I want to do it and I don’t want to do, but they have to come to the table.

“They want to negotiate, they want to negotiate badly, but I told them, ‘You’re not ready yet. You’re not ready yet.’

“They lived too well for too long and frankly I guess they think that the Americans are stupid people. Americans are not stupid people.”

The US and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods over the past few months.

Investor worries about the escalating trade conflict have rattled financial markets.

Raising rates

Hundreds of companies are due to provide investors with updated earnings forecasts in coming weeks.

Analysts attribute some of the recent share price declines to sales by investors worried that trade tensions will hurt growth, while trade tariffs and rising interest rates raise costs for businesses.

By historic standards, interest rates remain low.

But the Federal Reserve has been gradually raising its interest rates since 2015, bringing the target for its benchmark rate to a range of 2% to 2.25% last month.

The Fed has said strong economic performance in the US means that the ultra-low rates put in place to spur economic activity after the 2008 financial crisis are no longer necessary.


Leave a Reply

Your email address will not be published. Required fields are marked *