Trump comments on the Federal Reserve's interest rate decision



Jerome Powell, President of the US Federal Reserve, speaks at a press conference following a meeting of the Federal Open Market Committee (FOMC) in Washington, DC, United States, the Wednesday, March 20, 2019.

Andrew Harrer | Bloomberg | Getty Images

Jerome Powell, President of the US Federal Reserve, speaks at a press conference following a meeting of the Federal Open Market Committee (FOMC) in Washington, DC, United States, the Wednesday, March 20, 2019.

Trump has publicly pushed the central bank to maintain its rates, even stating that he was "very unhappy" with Fed Chairman Jerome Powell. After a rate hike of a quarter point in December – the fourth of 2018 – he eviscerated the central bank.

"The only problem in our economy is the Fed," he wrote in a tweet. "They do not have a clue about the market, they do not understand the trade wars, the strong dollars or even the democratic closures across borders." The Fed is like a powerful golfer who can not score because he does not touch – he can not putt! "

Now, Trump can find different reasons to criticize the Fed, even if it puts a brake on interest rates. The Trump administration and the Fed have divergent views on the evolution of the economy in the coming months.

In its budget proposal for the 2020 fiscal year unveiled earlier this month, the White House forecast GDP growth of 3.2% for the year. The outlook for the administration exceeds the growth forecasts not only of the Fed, but also of Wall Street economists.

The White House did not immediately respond to a request for comment on the central bank's reduction of its GDP outlook.

The Fed has certainly not painted an alarming picture of the economy. In his statement Wednesday after his two-day meeting, the US labor market was "strong" but he noted that "the growth of economic activity has slowed down". In January, he said that the activity "has grown at a steady pace".

Powell told reporters Wednesday that "the European economy has slowed sharply, as has the Chinese economy." Although he does not have as much concern about American growth, he nevertheless pointed out that the struggles of the rest of the world can affect the United States.

"Just as strong global growth has been a squeeze, lower global growth can be a hindrance to our economy," he said.

– Jeff Cox from CNBC contributed to this report

Subscribe to CNBC on YouTube.


Source link