- Trump said Wednesday interest rates should be zero or negative and that the US should refinance its more than $22 trillion in debt.
- The central bank has increasingly become a target of verbal assaults out of the White House ahead of the 2020 elections.
- Policymakers are highly unlikely to cut to the extent Trump wants. The Federal Reserve operates independent from political influence.
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President Donald Trump lambasted the independent Federal Reserve early Wednesday, saying interest rates should be zero or negative and that the US should refinance its more than $22 trillion in debt.
“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” the president wrote on Twitter. “INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet…..”
Trump has long blamed slower growth on the central bank, which has increasingly become a target of verbal assaults from the White House ahead of the 2020 elections.
“It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing,” he added. “A once in a lifetime opportunity that we are missing because of ‘Boneheads.'”
The Federal Open Market Committee lowered its benchmark interest rate by a quarter percentage point in July and is expected to ease further this month. Policymakers are unlikely to cut to the extent the White House wants, since interest rates are already low by historical standards. But as recession concerns surface, some haven’t ruled out more aggressive moves.
Trump has in recent weeks sought to shift focus away from his trade policies, which have only added to strains on an economy already expected to cool this year. An ABC/Washington Post poll out Tuesday showed a majority of Americans think tariffs have increased the chances of a recession.