More tweets today from President Donald Trump in his campaign to pressure the Federal Reserve into more aggressive cuts to interest rates.
“Incompetence is a terrible thing to watch, especially when things could be taken care of sooo easily. We will WIN anyway,” the President wrote. “It would be much easier if the Fed understood, which they don’t, that we are competing against other countries, all of whom want to do well at our expense!”
And again: “They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW. Yield curve is at too wide a margin, and no inflation!”
Trump was unhappy last week that the Fed cut interest rates by just 25 basis points, instead of 50, and that Fed chair Jerome Powell took pains to describe the reduction as a “mid-cycle adjustment” rather than the start of a long campaign of easing.
On Tuesday, St. Louis Fed President James Bullard, speaking in Washington, pushed back in a gentle but unmistakable way: “U.S. monetary policy cannot reasonably react to the day-to-day give-and-take of trade negotiations,” and noted that, at the moment, he only has one more quarter-point cut in his forecast for 2019.
Trump wants the Fed to cut interest rates more aggressively to offset the negative effects of his trade war with China on domestic economic growth. He has also said that he wants the Fed to weaken the U.S. dollar in response to China’s decision on Monday to let the yuan fall below 7 yuan to the dollar in retaliation for the President’s decision to place 10% tariffs on an additional $300 billion in Chinese exports to the Unite States.
