Trump criticizes Federal Reserve over interest rate hikes
President Donald Trump told CNBC during an interview on Thursday that he does not agree with the Federal Reserve’s interest rate increases this year after Chairman Jerome Powell took over for Janet Yellen earlier this year.
“I put in a very good man in the Fed,” Trump said, referring to Powell. “I don’t necessarily agree with it because he’s raising interest rates.”
The Fed has raised rates two times this year, and policy makers expect two more rate hikes before the end of 2018. Testifying before Congress this week, Powell reiterated the U.S. economy is humming along and should continue to do so. "Looking ahead, my colleagues on the FOMC and I expect that, with appropriate monetary policy, the job market will remain strong and inflation will stay near 2 percent over the next several years" said Powell in prepared congressional testimony on the central bank’s semi-annual Monetary Policy Report on the U.S. economy Tuesday.
It is unusual for a sitting president to criticize the Federal Reserve, which is an independent body, free to set monetary policy without influence. The White House defended his remarks, saying, “Of course the President respects the independence of the Fed.”
“As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions – ‘I’m letting them do what they feel is best,’” a White House spokesperson said in a statement. “The president’s views on interest rates are well known and his comments today are a reiteration of those long held positions, and public comments.”
The president emphasized that he would have said these remarks if he was a private citizen as well: “I don’t like all of this work that we’re putting into the economy, and then I see rates going up.” Higher interest rates mean higher borrowing costs for consumers and higher mortgage rates.
This is not the first time Trump has targeted the Fed. On the campaign trail, he took a swipe at then-Chair Yellen.
Outside of his comments on the Fed, Trump touted the rising U.S. dollar as superior to the euro and China’s renminbi, which are dropping.
“They’re not doing what we’re doing,” Trump remarked, “and we already have somewhat of a disadvantage, although I’m turning that into an advantage.”