President Donald Trump ripped into the Federal Reserve Monday, accusing the central bank of making a “big mistake” with its interest rate hikes while suggesting that current Fed policy was undermining him in negotiations with China.
In an interview on CNBC’s “Squawk Box,” Trump tried to shift blame away from his administration for the actions of the Federal Reserve board, and said that whatever the reason for their decision not to go forward with expected rate hikes, it wasn’t because they were heeding his advice.
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“We have people on the Fed that really weren’t — they’re not my people, but they certainly didn’t listen to me because they made a big mistake. They raised interest rates far too fast,” Trump said, despite having appointed four of the five current members of the board. He has vowed to only install new members of the board who support rate cuts, but his last two picks withdrew from consideration after backlash from Congress.
In what seemed to be an effort to underscore his comments, Trump tweeted out a clip of them shortly after his appearance ended.
Trump has repeatedly voiced his opinions on what actions he believed the Fed should take, publicly chastising Chairman Jay Powell for raising interest rates until Powell backed off late last year. This year, Trump has urged Powell to cut interest rates, a move that some Fed watchers now say is more likely because of the president’s erratic trade moves. He’s also pressed Powell to resume quantitative easing, a bond-buying program launched by the Fed in 2008 in the wake of the financial crisis to stop the collapse of the housing market and increase the supply of money in the economy. Trump argued for that again Monday.
He also bemoaned current monetary policy for how it factored into his trade negotiations with China, saying that the communist country’s currency devaluation had “put them at a tremendous competitive advantage.”
“We don’t have that advantage because we have a Fed that doesn’t lower interest rates,” Trump lamented. “We have a Fed that raises interest rates the day before a bond issue goes out. So we have to pay more money. You tell me about that thinking, OK?”
Despite Trump’s assertion that the U.S. “should be entitled to have a fair playing field,” which he said was not currently the case “because our Fed is very disruptive to us,” he argued that “even without a fair playing field, we’re winning.”
“I’m winning, but I’m not winning on a level table,” he continued, contrasting the independence of the Fed with China’s central bank. “If I had a table — don’t forget the head of the Fed in China is President Xi — the president of China. He’s also the head of the Fed, he can do whatever he wants.”