If you ask President Donald Trump, the biggest threat to his presidency isn’t special counsel Robert Mueller’s Russia investigation, or a potential insurgency by Democrats in the November midterm elections: It’s the Federal Reserve.
“My biggest threat is the Fed,” Trump said on Tuesday during an interview with FOX Business’ Trish Regan. “Because the Fed is raising rates too fast, and it’s too independent," he complained.
So far this year, policymakers have already voted to hike short-term interest rates three times, and are poised to do so again in December, staying the course they laid out late last year. The Fed also forecast an additional three rate increases in 2019 and one in 2020.
Higher rates can impact consumers by increasing borrowing costs, which have already ticked higher. Auto loan rates are at a nine-year high, and 30-year fixed mortgage rates recently climbed to their highest level in seven years.
Trump appointed Fed Chair Jerome Powell, a member of the Fed’s board of governors, to replace former Chair Janet Yellen in February, but has been a frequent and outspoken critic of Powell since then, as he was with Yellen.
In August, he slammed the Fed saying he disagreed with the decision to raise interest rates and urging the central bank to instead focus on “what’s good for the country.” He also said he was “not thrilled” with Powell.
Although Powell has not directly addressed the critiques, but did note in August that while the U.S. economy is strong, the Fed is working to find a balance between the “shoals of overheating and premature tightening” he said.
Just last week, Trump blamed the Fed for driving a selloff in the stock market -- which saw the Dow Jones Industrial Average suffer its fourth-worst point loss in history -- saying the central bank had “gone crazy.” Global leaders fired back at Trump for what is considered poor form in taking aim at the Fed.
As of Tuesday the Dow had recouped all of the losses from last week’s volatility.