The president lambasted Powell throughout 2018 (and into 2019) as the Fed continued to tighten monetary policy and raise interest rates, which it typically does when it tries to curb inflation and ease the pace of expansion to prevent the economy from overheating.
Criticism of the Fed is unusual from a sitting president, with prior presidents taking a softer tone or refraining from weighing in on the direction of the central bank’s policies. In breaking with that tradition, Trump has blamed the Fed and its leader for swings in the stock market and undermining trade deliberations with Beijing.
“I think the Fed is making a mistake. They are so tight,” the president said in October 2018. “I think the Fed has gone crazy.”
The Fed instituted nine quarter-percentage-point hikes between Dec. 16, 2015 and Dec. 19, 2018, the last time it raised rates. It has cut rates three times in 2019 in what it characterized as a “mid-cycle adjustment.”
To be sure, the U.S. stock market has soared since Trump’s victory over Hillary Clinton in 2016, with the S&P 500 up more than 40%. The broad market index touched a new all-time high on Tuesday as investor concern over the U.S.-China trade war eased.
Though investors aren’t certain whether the two nations are closet to a permanent deal, stocks have rallied to records in recent weeks in expectation of a sort-of trade truce.
Source Article from https://www.cnbc.com/2019/11/12/trump-rails-on-fed-says-market-and-economy-would-be-doing-even-better-without-powell-mistakes.html
Comments