President Trump ramped up his criticism of the Federal Reserve on Friday, ripping the central bank for raising interest rates amid increased financial tensions between the U.S. and key economic partners.
Trump said on Twitter that Fed rate hikes would put the U.S. at a competitive disadvantage with China and the European Union, adding that higher rates would hinder his efforts to force China into fairer trade terms with the U.S.
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“China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day – taking away our big competitive edge,” Trump tweeted. “As usual, not a level playing field.”
“The United States should not be penalized because we are doing so well,” he added.
On the campaign trail, Trump frequently accused China of weakening its currency, saying it helped make Chinese exports cheaper. But the U.S. Treasury Department has declined to label the country a currency manipulator for two consecutive years.
Trump said shortly after his first meeting with Chinese President Xi Jinping in 2017 that China had stopped manipulating its currency because of his White House victory.
Despite that, Trump said Friday that the Fed should keep rates low so the U.S. economy could make up lost ground to China. The president said China has harmed the U.S. by deflating its currency to suppress the price of Chinese goods and violating trade laws.
Trump also expressed concerns about how higher interest rates would impact record levels of U.S. federal debt, which now exceeds $20 trillion.
“Tightening now hurts all that we have done,” Trump tweeted. “The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?”
Trump’s comments came shortly after CNBC aired an interview with the president in which he bashed the Fed’s planned rate hikes. The interview was taped Friday afternoon, and CNBC aired Trump’s complaints about the Fed shortly after.
The Fed has been slowly raising interest rates since December 2015 in an effort to avoid overheating the U.S. economy. Low interest rates reduce the costs of borrowing money and fuel economic expansion, but risk spurring inflation and financial market bubbles.
The Fed raised interest rates in June by 0.25 percentage point to put the federal funds rate in the 1.75 percent to 2 percent target range.
The Fed has raised interest rates twice this year and is expected to increase rates two more times before 2019.
Interest rate hikes can suppress investment and the unemployment rate, two metrics Trump and Republicans have touted throughout his presidency.
Unemployment stands at 4 percent, close to record lows, while the economy has continued to expand under Trump. The GOP is pitching its economic record heading into the November midterm elections.
Trump told CNBC that he’s “not thrilled” with Fed Chairman Jerome Powell, who he appointed, over the central bank’s rate hikes.
“I don’t like all of this work that we’re putting into the economy and then I see rates going up,” Trump said.