President Trump on Monday said the Federal Reserve “blew it” by not cutting interest rates during its policy meeting last week, arguing the central bank “doesn’t know what it is doing.”
In a pair of Monday morning tweets, Trump touted the strength of the U.S. economy while bashing the Fed for not providing more stimulus for economic growth.
The Fed announced last week that it would hold interest rates for the time being, but stood ready to cut rates if the economy slows, trade tensions rise and inflation remains low.{mosads}
The independent central bank had been under immense pressure from Trump to cut rates. The president has often accused the Fed of hindering growth through its four rate hikes last year.
Trump on Monday tweeted that the U.S. economy is “on course to have one of the best Months of June in US history,” but could have been even better if the Fed added stimulus through lower borrowing costs.
He added that the Fed should match efforts by foreign central banks to boost their economies, likely referencing pending moves from the European Union and China.
“Think of what it could have been if the Fed had gotten it right. Thousands of points higher on the Dow, and GDP in the 4’s or even 5’s,” Trump tweeted. “Now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!”
The Fed did not immediately respond to a request for comment.
Trump has bashed the Fed and its chairman, Jerome Powell, for close to a year as the central bank has sought to neutralize interest rates and prevent rampant inflation. The Fed has hiked interest rates nine times since 2015, seven since 2017 and four times under Powell, who took over as chairman in 2018 after being nominated by Trump.
The Fed is designed to be a nonpartisan, independent entity, mandated to foster maximum employment and stable prices. Many presidents have privately pressured Fed chairmen to keep rates low, but Trump’s public campaign against the bank is without clear precedent.
Trump has also floated firing or demoting Powell, which is likely illegal under federal law, though the president insists he has the power to do so.
Powell has downplayed Trump’s criticism, saying the Fed does not consider politics in its policy decisions, and that he will not vacate the chairmanship before his term expires in 2022.
“I think the law is clear that I have a four-year term and I intend to serve it,” Powell said Wednesday, following the Fed’s announcement that it would hold rates steady.
Updated at 9:47 a.m.