Trump estimates that the stock market would be "10,000 points higher" if the Fed did not raise rates



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President Donald Trump reiterated his criticism of Federal Reserve Chairman Jerome Powell in a recent interview with George Stephanopoulos of ABC News, saying that the economy and the market Fellow could do a lot better "if we had someone different" at the head of the central bank.

The president predicted that GDP would be 1.5 percentage points higher if Powell and his fellow central bankers had not enacted rate hikes and "quantitative tightening." In addition, he said the stock market would rise by 10,000 points, probably referring to the Dow Jones Industrial Average, which was 26,106 on the brink of trading on Friday.

"If it did not do anything, or maybe even a little less well, we would be, in my opinion, just an opinion, 10,000 points higher than already a very high number," Trump said. This number implies a potential increase of 38% for a bluechip average, about double the gain already recorded since the November 2016 elections.

Trump has repeatedly criticized Powell, whom he has appointed to this post in early 2018, and openly stated that he thought the Fed should reduce its interest rates. The previous presidents have already occupied the seats of the Fed, but rarely so publicly.

"He is my choice and I do not agree with him at all," Trump said. "As you know, he's independent … but I'm not happy what he's done."

Under Powell's tenure, the Fed raised its overnight rate four times in 2018 and had plans to increase twice as much in 2019 before creating a political pivot earlier this year.

In addition to the rate hike, the Fed has reduced its balance sheet by about $ 600 billion by allowing its product to be withdrawn from the proceeds of bonds it has earned in three phases of quantitative easing. Trump defined the process as "taking money out of checkouts so people can not use it to do what they do."

The Fed is reabsorbing the balance sheet and will stop it completely in September.

Trump said "it's okay to raise interest rates a bit," but added that this would make the nation's $ 22 trillion debt more expensive. Debt has risen 10.3% over the past two and a half years of Trump's term, after climbing nearly 88% under former President Barack Obama.

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