President Donald Trump continued to attack the Federal Reserve on Thursday, saying Chairman Jerome Powell is being too stringent with monetary policy and is making a mistake.
He blamed the Fed for causing a massive drop in stocks this week that took the Dow Jones Industrial Average down more than 800 points on Wednesday alone. Stocks fell again Thursday.
“It’s a correction that I think is caused by the Fed and interest rates,” Trump said. “The dollar is very strong, very powerful – and it causes difficulty doing business.”
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Trump said he believes the Fed’s monetary policy “is far too stringent,” adding that “they’re making a mistake and it’s not right.”
In a response to whether he is considering firing Powell, Trump said “no, I’m not going to fire him. I’m just disappointed.”
Trump has previously expressed displeasure with the central bank, and that’s led some to fear the institution’s independence is at risk. His attacks on the Fed renewed late Wednesday, when he said he was “not happy” with the central bank’s policy decisions. Trump told Fox News he could’t understand why Powell was continuing to tighten U.S. monetary policy.
“The Fed is going wild,” Trump said during a telephone interview on Wednesday. “The problem [causing the market drop] in my opinion is Treasury and the Fed. The Fed is going loco and there’s no reason for them to do it. I’m not happy about it.”
U.S. officials have sought in recent months to emphasize that Trump would honor the Fed’s historic ability to make decisions independent of political interference.
“We as an administration absolutely support the independence of the Fed,” Treasury Secretary Steven Mnuchin reportedly said in July.
As recently as Tuesday, Trump had signaled that he understood the importance of maintaining a firewall between the White House and the Fed. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them.
“I like to stay uninvolved with them. I have not spoken” to Powell all year, Trump said.
Trump’s attitude towards the Fed seemed to change Wednesday, however, as fears about rapidly rising rates helped cause the Dow Jones Industrial Average to drop more than 800 points by day’s end. The S&P 500 posted its worst day since February and clinched its first five-day losing streak since 2016.
Source: cnbc.com | Original Link