President Trump reportedly blamed the Federal Reserve once again for slowing down the nation’s economy, despite the central bank recently saying that it foresees no interest rate hikes in the year ahead.
Trump criticized both the Fed and its chairman, Jerome Powell, at three meetings in the past week, according to The Wall Street Journal. The president told Republican senators, supporters and staffers that if the Fed had not hiked the benchmark federal funds rate in December, economic output and stocks would be higher, the Journal reported.
“Mnuchin gave me this guy,” Trump complained at one point, reportedly blaming Treasury Secretary Steven Mnuchin for recommending Powell for the top Fed job. The president also reportedly told Powell “I guess I’m stuck with you,” during a recent phone conversation.
Although Trump hand-picked Powell more than a year ago to replace then-Chair Janet Yellen, he’s become a harsh critic of the head of the central bank. At the end of March, Trump lambasted Powell for hindering economic growth, telling FOX Business’ Maria Bartiromo that the U.S. GDP would have climbed higher than 4 percent in 2018 if the Fed had not voted to raise interest rates four times that same year.
Signs of renewed tensions with the Federal Reserve emerged when Trump two weeks ago nominated Stephen Moore, a conservative economic analyst and frequent critic of the Fed, to fill a vacancy on the Fed’s seven-member board.
Trump’s criticisms of the Fed, and of Powell, also have fueled speculation among some analysts that the Fed is intentionally designing its monetary policy to placate the White House. At its second policy meeting of the year, the Fed voted to keep interest rates steady, in addition to signaling there will be no hikes for the remainder of 2019.
That marked a stark turn from its December meeting, when Powell suggested there could be as many as two interest rate hikes this year and one in 2020. Now, policymakers forecast one rate hike in 2020 and none in 2021.
Powell has not responded publicly to the president's criticisms, but stressed in February the importance of the Fed's "precious" independence from politics.