Trump demands further rate cut as economy 'handcuffed' by Fed

Trump demands further rate cut as economy 'handcuffed' by Fed

Trump demands further rate cut as economy 'handcuffed' by Fed

President Donald Trump said Thursday he is not happy with the strong United States dollar, which is hurting American manufacturing, and blamed the Federal Reserve for keeping interest rates too high.

In a series of tweets, he noted that overnight three central banks - those in India, Thailand and New Zealand - had cut rates.

US President Donald Trump on Wednesday continued to hammer the Federal Reserve, demanding more stimulus to boost the economy as the 2020 elections approach. The mood on stock markets was a bit better on Tuesday as Beijing solidified the exchange rate a little, but it doesn't take much of late to spark a big swoon or run up in stock prices.

Hardline White House trade advisor Peter Navarro on Tuesday said the Fed should cut as much as a full percentage point from the key interest rate to reverse the increases made previous year as the economy was in a strong recovery.

The fed funds contract suggested there was an 83% likelihood the Fed may follow a possible September cut with a quarter-point rate decrease in October. Trump wants the Fed to act now, as other countries "do well" at the expense of the US.

Trump's view is that China employs a number of trade policies that are unfair to the US, including stealing technology, keeping their own market closed off to foreign firms, and keeping their currency artificially low to make Chinese suppliers look cheaper. "That can lead to unstable financial markets and worse economic outcomes", the former Fed leaders wrote.

"I may perhaps well comprise per chance anticipated rather more [stock market losses], but indirectly, it's going to head mighty increased than it ever would comprise gone, because China used to be love an anchor on us", the president acknowledged.

But taking economic growth, employment and inflation into consideration, the Fed could have waited for some time before cutting the interest rate.

Central bank chief Jerome Powell would not commit to further loosening policy, describing the last move as only a "midcycle adjustment".

"China used to be killing us with unfair trade deals".

In December, Bloomberg News reported that Trump had privately discussed firing Powell. According to Trump, the interest rate level held high by the Fed keeps the Dollar high compared to other countries.

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