Trump continues to rip Fed over interest rate hikes

Trump continues to rip Fed over interest rate hikes
Trump continues to rip Fed over interest rate hikes

President Donald Trump continued to rip the Federal Reserve on Friday on its decision to raise interest rates, saying it hurts the country’s trading posture.

“China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge,” Trump said on Twitter.

“Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?,” he asked rhetorically.

The comments follow his criticism Thursday in an interview in which he called the rate hikes a threat to the U.S. economy.

The White House quickly released a statement that followed Trump’s remarks amid criticism. Presidents historically do not comment on the Fed’s policy as it could be viewed as influencing the bank’s decisions, which are intended to be independent of political influence.

Trump in December lowered the corporate tax rate to 21 percent from 35 percent to give a boost to the economy, which is now forecast to grow close to 3 percent this year.

The stock market and shares of most American companies also gained, and some hit record levels, before and after the cuts.

“But I don’t like all of this work that goes into doing what we’re doing,” Trump said, arguing that the Fed’s hikes could disrupt economic growth.

Fed Chair Jerome Powell told the Senate earlier this week that it is best for the central bank to keep gradually rising interest rates, for now, since the job market is strong and inflation is near the Fed’s target rate of 2 percent.

Trump noted in the interview that he does not approve, but he “put a very good man in” at the Fed, referring to Powell.

Former Dallas Fed President Richard Fisher, on the other hand, maintained that preserving the independence of the Fed is one of the hallmarks of the U.S. economy

“No president should interfere with the workings of the Fed,” he said. “Were I Chairman Powell, I would ignore the president and do my job and I am confident he will do just that.”

Since Trump took office, the Fed made a total of five rate hikes. The bank has raised rates twice this year and two more times before the end of the year.