The Federal Reserve, as expected, cut interest rates for the second time since July — and, as expected, it wasn’t enough for President Donald Trump.
Trump assailed policy makers just minutes after their decision Wednesday to cut the benchmark interest rate by another 25 basis points.
“Jay Powell and the Federal Reserve Fail Again,” he said in a tweet. “No ‘guts,’ no sense, no vision! A terrible communicator!”Trump said of Powell in his latest Twitter attack on the central bank, less than a half hour after the Fed announced its second rate reduction this year.
Trump had called for a larger rate cut from the Fed. He has repeatedly railed against the Fed and Powell, whom he appointed as chair, claiming that the Fed’s monetary policy has been holding back U.S. economic growth.
The Fed, in announcing the rate cut, said Trump’s trade war with China and a global economic showdown ran the risk of creating headwinds for U.S. economic growth, but it gave mixed signals as to what sort of actions it may take next.
The president has repeatedly attacked the Fed since mid-2018, demanding lower rates to help boost economic growth. At one point he asked whether Fed Chair Jerome Powell or China’s president, Xi Jinping, was “our bigger enemy.”
Powell acknowledges that officials at the U.S. central bank are fractured about next steps on interest rates.
Forecasts from the Fed show uncertainty about the course of rates after Wednesday’s rate cut. The uncertainty stems from Trump’s pursuit of tariffs against China and a broader global slowdown that has irked businesses and manufacturers though consumer spending has been relatively solid.
“This is a time of difficult judgments and disparate perspectives,” Powell said at a news conference. “I really do think that is nothing but healthy.”
The president has wanted the federal funds rate to be near-zero, rather than the range of 1.75% to 2% set by the Fed. Trump has remarked that other countries such as Germany have an advantage because their interest rates are negative, even though negative rates are a sign that those economies are in a recession and may struggle to grow in the longer term.
The market expected the quarter-point cut to the federal funds rate, which influences many consumer and business loans. But three of the 10 voting officials dissented from the decision, and the Fed looks divided on what to do next. That ambiguity may have displeased investors on Wall Street.
Material from Bloomberg, Reuters and the Associated Press has been used in this report.