President Trump on Monday again took aim at the Federal Reserve and its chairman, Jerome Powell, in a series of tweets urging the central bank to lower rates and restart quantitative easing.
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“The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well,” Trump wrote in a tweet. “If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!”
Trump, in the first part of the series of tweets, said the economy is “very strong despite the horrendous lack of vision by Jay Powell and the Fed.”
The central bank lowered its benchmark interest rate last month by a quarter-point, to a range of 2 percent to 2.25 percent – the first rate cut in more than a decade. When the Fed announced the move, Trump voiced his displeasure via Twitter and took aim at the central bank’s chairman, Jerome Powell, who has held the post since early 2018 after being nominated by the president.
And despite fears of a possible recession, Trump touted the state of the American economy last week, calling it the “biggest, strongest and most powerful” in the world.
“The United States is now, by far, the Biggest, Strongest and Most Powerful Economy in the World, it is not even close!” Trump said in a tweet. “As others falter, we will only get stronger. Consumers are in the best shape ever, plenty of cash. Business Optimism is at an All Time High!”
Markets last week flashed a warning sign of a possible recession, as the spread between the 2-year Treasury note and 10-year bond inverted for the first time in more than a decade. Typically, the yield of the 10-year bond is higher than that of the 2-year note. The inverted spread caused investors to flee to the bond market and, as a result, the Dow Jones Industrial Average suffered its worst day of 2019 on Wednesday, closing 800 points in the red.
Despite the recent uneasiness in markets, U.S. small business appears to be holding steady. The NFIB Small Business Optimism Index rose to 104.7 in July from 103.3, with “expectations for business conditions, real sales and expansion” gaining significantly.