President Trump delivered some of his most pointed attacks till date on the Federal Reserve Chairman Jerome Powell on Tuesday. He called the central bank the biggest risk to the U.S. economy.
In an interview that took place at the Oval Office with The Wall Street Journal, the President said that Powell almost looks like he is very happy raising interest rates.
He added that every time they do something great, Powell increases the interest rates. When asked if he regrets appointing Powell, he said it was too early to tell but maybe.
Trump said he does not know under what circumstances he might make an attempt to remove the Fed chairman but added that he is very unhappy with the Fed because Obama had zero interest rates.
Trump’s comments came amid another volatile day at the stock market. A couple of weeks ago, when the three major equity market indexes dropped by as much as 3 percent in a day, Trump said the Fed had gone crazy.
Over the past few months, Trump has given a number of different explanations on why he is unhappy with the pace of Fed’s rate hike campaign. He said Powell wants a weaker dollar to boost exports to help with trade negotiations, he doesn’t think inflation is at the risk of getting out of control; and he also wants to pay down the national debt. Powell has also generally said that he prefers low rates.
To help support sustained economic growth without accelerating inflation as the near-record expansion continues, Fed has been sticking to steady rate hikes, about one every quarter. New tax cuts as well as increased government spending are accelerating short-term growth. However, wage gains are still moving at only a modest rate.
The central bank also kept interest rates very close to zero for almost a decade to help the economy recover in the wake of the 2008 financial crisis. However, it has been slowly bringing them back to a very normal level as the economy has strengthened.