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WASHINGTON • US President Donald Trump has launched a furious and personal attack on Twitter against the Federal Reserve and President Jerome Powell, accusing the Fed of "doing nothing new!" and wondering who is "our greatest enemy" – Mr. Powell or the leader of China.
This explosion came after Mr. Powell, addressing the central bankers in Jackson Hole, Wyoming, gave vague badurances that the Fed would "do the right thing" to support the country's economic expansion. . Although the wording was widely considered to mean interest rate reductions, it gave no indication as to the possibility or reduction of many reductions by the rest of the year.
Mr Powell had just spoken before Mr Trump resumed his criticisms of the Fed, which he repeatedly accused of keeping rates too high. For months, the President ridiculed Mr. Powell, the man he chose to head the Fed.
"As usual, the Fed did not do anything!" Mr. Trump tweeted Friday adding, "We have a very strong dollar and a very weak Fed."
He went further and said, "My only question is who is our greatest enemy, Jay Powel (sic) or President Xi?" – a reference to Chinese President Xi Jinping. Mr. Trump later corrected the spelling of Mr. Powell's name.
Last Friday, at the request of journalists, if he wanted Mr Powell's resignation, Mr Trump replied: "Let me say this: if he did, I would not stop him." Mr. Powell stated that he had no intention of resigning before the end of his four-year term.
Dr. David Jones, a well-known historian of the US Federal Reserve, said the "enemy" remark set an unfortunate precedent.
"This calls into question something that has been sacred in the history of the world's most prosperous central bank," said Dr. Jones, author of four books on the Fed. "Successful central banks are those that are independent of political pressures and free to pursue appropriate monetary policy."
The law creating the Fed states that its officials may be "dismissed for cause" by a president. Although this question has never been asked about a Fed official, the courts ruled several decades ago that "for motive" meant more than a policy disagreement with a president.
ASSOCIATED PRESS
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