In an interview with Axios, Kudlow says the Fed should cut rates "immediately" by 50 basis points. With the Federal Funds rate between 2.25%-2.50%, that would bring rates below 2 percent.
While calls for the Fed to cut rates are in the early stages, policy makers have dialed down their hawkish stance, indicating that a planned series of rate hikes will slow or be tabled in 2019.
Plus, there are growing concerns of a looming recession among investors who are alarmed by the inverted yield curve as explained by FOX Business. Last week, the three-month and the 10-year Treasury yields inverted for the first time since mid-2007. Some economists and investors, including Gary Kaltbaum of Kaltbaum Capital Management, who is also a FOX Business contributor, say this presages recessions.
Trump has been one of the most vocal critics of the Federal Reserve and Chair Jay Powell, razzing policymakers throughout 2018 on Twitter and in media interviews, amid their planned path of multiple rate hikes in 2018 and 2019.
“The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!" Trump tweeted in December.
While rising interest rates signal an improving economy, it also can raise borrowing costs on items like mortgages and credit card accounts and possibly slow economic growth.