Former Federal Reserve Chairman Alan Greenspan praised President Trump on Thursday for successfully pushing for a cut to the corporate tax rate, but suggested he should temper criticism regarding the Fed’s recent interest rate hikes.
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Trump signed a tax reform bill last December that slashed the corporate tax rate to 21 percent to 35 percent and has championed efforts to unwind unnecessary regulations. The U.S. GDP exceeded 4 percent in the second quarter, while unemployment has dropped below 4 percent to its lowest level in nearly five decades.
“The economy is now sagging a bit [but] it was very significantly helped by the corporate tax cut and the deregulation,” Greenspan told FOX News host Dana Perino. “But the third quarter and the fourth quarter of this year are going to be a lot shorter than the 4 percent [GDP growth] we’re looking at as the most recent published number.”
The president has sharply criticized the Fed’s plan to continue hiking interest rates amid rising inflation. Trump argues that the rate hikes have occurred too soon, referring to the Fed this week as his “biggest threat” during an interview with FOX Business Network.
Trump has been ambivalent about whether he could look to oust Powell, but noted that he is “not happy” with the Fed chairman.
Greenspan suggested Trump’s remarks regarding the Fed could be misguided.
“I think he did the right thing with cutting taxes and, as I said, with deregulation,” Greenspan said. “I think he should stand pat with that, because that has created a very obvious change in the quality of the economy. But to continuously comment, after he’s talking about the independence of the Fed, sounds to me a bit awkward.”