President Donald Trump sharply criticized Jerome Powell in an interview aired Friday, blaming the Federal Reserve chairman for raising interest rates and saying he is at odds with the U.S. central banker.
“He’s my pick — and I disagree with him entirely,” he said in an interview with ABC News that was filmed in the back of a car with George Stephanopoulos and posted on Twitter.
“Frankly, if we had a different person in the Federal Reserve that wouldn’t have raised interest rates so much we would have been at least a point and a half higher,” Trump said, apparently referring to the pace of U.S. economic growth.
Trump’s broadside comes a week before the Fed meets in Washington, when it’s expected to discuss whether an interest-rate cut is needed to help offset a darkening economic outlook, partially caused by his trade war.
The president, who picked Powell to lead the central bank, said “we also have people in there that weren’t my pick.”
Trump has nominated four of the five current members of the Fed Board of Governors in Washington, having nominated Randal Quarles and Michelle Bowman in addition to Powell and Vice Chair Richard Clarida. All voted for the rate hike in December, together with Governor Lael Brainard, who was appointed by President Barack Obama. There’s also five regional Fed presidents who vote on monetary policy decisions but aren’t picked by the White House.
Trump has been stymied in recent months in his attempts to install political loyalists on the Fed board. The president has soured so much on Powell that he even discussed firing him, according to a Bloomberg report in December.
Trump’s complaints continue a feud with the central bank that burst into the open in the middle of last year, shattering a nearly three-decade White House tradition of public silence on monetary policy — out of respect for Fed independence. Trump acknowledged the central bank was independent but said he was allowed to speak out, saying “I’m not happy with what he’s done.”
Powell has refused to respond to the president’s criticism and repeatedly stressed that policy makers will ignore political pressure as they set policy to support maximum employment and stable prices.
via newsmaxfinance
The point of monetary policy is to maintain balance and stability. The Fed raises interest rates when the economy is heating up a little too much so that we don’t get inflation and economic bubbles. Then there is room to lower interest rates when the economy slows down to get it going again. Mr “Go’Go” Trump never saw an inflationary trend or bubble he didn’t like. After all, when you don’t pay your bills it doesn’t matter if prices go up