President Donald Trump, like most presidents before him, is no fan of the Federal Reserve and its raising of interest rates.
The only difference between Trump and past presidents is he lets his criticisms fly while they kept their issues out of the headlines, for the most part, because the Fed is supposed to operate free of political influence.
Much has been made about Trump’s Fed bashing, and he turned it up on a notch Tuesday in The Wall Street Journal, saying Fed Chair Jerome Powell — who Trump himself appointed — is threatening U.S. economic growth and that Powell “almost looks like he’s happy raising interest rates.”
Per WSJ:
“Every time we do something great, he raises the interest rates,” Mr. Trump said, adding that Mr. Powell “almost looks like he’s happy raising interest rates.” The president declined to elaborate, and a spokeswoman for the Fed declined to comment.
Mr. Trump said it was “too early to say, but maybe” he regrets nominating Mr. Powell.
The Fed has raised its benchmark interest rate three times this year and all signs point to another hike in December, as well as three more next year. Powell has said the Fed will raise rates to a so-called “neutral level” that won’t hinder economic growth while also keeping inflation in check.
The president’s caustic comments about Mr. Powell came as Mr. Trump repeatedly described the economy in personal terms. He referred to economic gains during his time in office as “my numbers,” saying, “I have a hot economy going.” He described his push for growth as a competition with former President Obama’s record, saying that increases under his Democratic predecessor were skewed because of low-interest rates.
Trump also touched on the ongoing trade war and tariffs disputes, which Senate Majority Leader Mitch McConnell asked him to fix as soon as possible before they endanger the economy further.
But when asked what he thinks is the biggest threat to the economy his answer was, of course, “the Fed.”
“To me the Fed is the biggest risk, because I think interest rates are being raised too quickly,” the president said just before he pushed a red button on his desk, summoning an iced cola delivered to him on a silver platter.
Higher interest rates add to the national debt, dragging down the economy.
Asked why he thought Mr. Powell was raising rates, Mr. Trump paused, then said, “He was supposed to be a low-interest-rate guy. It’s turned out that he’s not.”
Trump did not say whether he was considering the removal of Powell yet — if he even has the legal authority to do so.
“I don’t know,” he said. “I’m just saying this: I’m very unhappy with the Fed because Obama had zero interest rates.”
“I am generally impressed with Chairman Powell’s leadership,” said Rep. Jeb Hensarling (R., Texas), the chairman of the House Financial Services Committee, in an interview Tuesday. He said the Fed’s current interest-rate “trajectory seems to be headed in a good direction.”
Regarding tariffs, Trump said they are “small.”
“Where do we have tariffs? We don’t have tariffs anywhere,” Mr. Trump said when asked about the risks tariffs pose to the economy. “You know what happens? A business that’s doing badly always likes to blame Trump and the tariffs, because it’s a good excuse for some incompetent guy that’s making $25 million a year.”
He then went on to say the tariffs he just said “we don’t have” helped seal the deal for his NAFTA revamp.
“I could never have done it without tariffs,” he said of the U.S.-Mexico-Canada Agreement, the revised Nafta deal that the three nations reached earlier this month, but which requires approval from Congress.
“I’m talking tariffs, I’ll use tariffs,” he said. “I mean it.”
