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President Donald Trump plans to align US Federal Reserve Chairman Jerome Powell on the downfall of the president's trade and tax policy.
In a series of comments over the past two days, Trump attacked the Fed to raise interest rates and reduce its efforts to reduce the US trade deficit. "He is setting up someone else to blame if things are not going according to his plan," said Mr Trump. Mark Spindel, Founder and Chief Investment Officer, Potomac River Capital LLC, Washington
The Fed has raised rates five times since Trump took office in January 2017 and has tentatively scheduled two additional increases for this year. It also reduces the support it brings to the economy by gradually reducing its holdings of Treasury bills and mortgage bonds.
While Japanese and European authorities maintain rates close to zero, investors have increased the value of the dollar against the yen. euro. This has made American products less competitive. Trump said that he thinks it's unfair.
"The United States should not be penalized because we are doing so well," tweeted Trump on Friday. "Tightening now hurts everything we did."
The president, who launched tariff battles with most major US trading partners, also lambasted China and Europe to keep their currencies weak in order to gain an advantage. exporters
Much of Trump's anger with regard to the Fed seems to be targeting the impact that interest rate hikes from the central bank have had on the dollar. Despite the depreciation of Trump, the greenback is about 5% higher than when Trump imposed tariffs on steel and aluminum imports on March 23.
Mick Mulvaney, Trump's budget director does not recognize that President's policies can allow the economy to grow faster without boosting inflation.
"Whenever things seem to be starting to improve, the Fed pulls the brakes," he told Fox News on Friday. Trump, left, shakes Putin's hand at a press conference in Helsinki on July 16th.
Photographer: Chris Ratcliffe / Bloomberg
The president's comments upset his relationship with Russian President Vladimir Putin after the two leaders met in Helsinki on Monday. Trump has been criticized for his lukewarm support during a press conference with Putin for the discovery by US intelligence that Russia was scrambling for the 2016 elections.
is not unusual for politicians to blame the Fed. The collapse of Trump, however, comes at a time when the economy is "in a very good position," according to Powell.
The unemployment rate under Trump dropped to 4%, 4.8% in the month he was sworn in, and some economists predict that gross domestic product grew about 4% in the last quarter, double the pace of the first three months of the year. The Commerce Department's first estimate for the second quarter's GDP is expected to be released on Friday.
Trump told CNBC in an interview broadcast Thursday that he was "not thrilled" by the Fed's rate hikes
. happy about it, "said the president." But at the same time, I let them do what they deem the best. "Trump also called Powell, whom he named to succeed Janet Yellen , "a very good man."
Powell declined to comment when approached by a reporter in Buenos Aires, as he was gearing up for weekend meetings with finance ministers and central bankers of the United States. Group of 20.
All the ways that Trump can (and can not) influence Powell's policy
how much direct pressure he can put on the head of the Fed.Designed by Trump and confirmed by the Senate with Broad bipartisan support, Powell has a four-year term as president that ends in 2022. According to the Federal Reserve Act, a Fed chairman, or a Fed governor, can not be revoked his term ends " for cause ", which is not defined.
The attacks from the President against Fed rate hikes and the recent strengthening of the dollar highlight an inherent contradiction at the heart of its economic policies. he is trying to reduce the US trade deficit by imposing tariffs on imports, his tax cuts stimulate the federal government's red ink and exert upward pressure on interest rates and the dollar. "This underscores the inconsistency of these policies" Joachim Fels, global economic advisor at Pacific Investment Management Co. in Newport Beach, Calif.
And he leaves vulnerable Powell and the Fed skewed [19659002] – With assista nce by Craig Torres
