Trump rips Fed for raising interest rates

President Donald Trump said on Thursday that he's "not thrilled" with the Federal Reserve for raising interest rates....

Posted: Jul 20, 2018 2:37 PM
Updated: Jul 20, 2018 2:37 PM

President Donald Trump said on Thursday that he's "not thrilled" with the Federal Reserve for raising interest rates.

Breaking with tradition to avoid criticizing the Fed, Trump told CNBC he's worried that the central bank's policies will cancel out his efforts to speed up the economy.

"I don't really - I am not happy about it," Trump said in excerpts released by the network.

He also said that higher interest rates will strengthen the US dollar too much, putting the United States at a "disadvantage" while central banks in Europe and Japan keep rates low. Trump complained that China's currency is "dropping like a rock."

"I don't like all of this work that we're putting into the economy and then I see rates going up," Trump said.

The US dollar lost ground against rival currencies following the comments.

Even though he's frustrated, Trump said he's "letting them do what they feel is best." He also called Jerome Powell, whom Trump nominated to lead the Fed, a "very good man."

A spokesperson for the Fed declined to comment.

The Fed began raising interest rates from emergency levels in 2015, under Powell's predecessor Janet Yellen. Powell has said the economy is strong enough for the Fed to keep raising rates gradually.

Testifying before Congress on Tuesday, Powell cited "robust job gains" and an overall "solid pace of growth" as reasons for recent and future rate hikes.

Related: Larry Kudlow: No recession until maybe 2024

Presidents have historically avoided criticizing the Fed, which is designed to be independent from political interference. The Fed is charged with keeping prices stable, often by raising interest rates to prevent the economy from overheating. A loss of confidence from investors could lead to concerns of runaway inflation.

"This is extraordinary to see Trump go after the Fed like this," said Greg Valliere, chief global strategist at Horizon Investments.

Former President Richard Nixon was criticized for bullying the Fed into keeping interest rates low, pressure that led to debilitating inflation. Since then, the Fed has sought to reassure investors that it is independent.

"If the market starts to feel the Fed is being manipulated politically, that's a really bad story. It would lead to fears that the Fed won't be as vigilant against inflation," Valliere said.

Related: China's yuan plunges again. Is a currency war coming?

Trump's criticism of the Fed could backfire if Powell and the Fed feel the need to prove their independence.

"This puts Powell in the very awkward position," Valliere said, "of having to show the market that he's tough on inflation."

Trump defended his comments to CNBC by saying he is "just saying the same thing that I would have said as a private citizen."

"So somebody would say, 'Oh, maybe you shouldn't say that as president.' I couldn't care less what they say, because my views haven't changed," Trump said.

Still, Wall Street took notice of the president's apparent desire for a weaker dollar. The greenback quickly lost ground and Treasury yields retreated.

"Uncertainty over the White House's dollar policy will certainly sow renewed seeds of doubt into global investors," Viraj Patel, foreign exchange strategist at ING, wrote in a report.

Related: Fed's Powell: Best way forward is to keep raising rates

Trump had a love-hate relationship with former Fed chief Janet Yellen. During the 2016 campaign, Trump said she should be "ashamed of herself" for creating a "false stock market" with low rates.

As president, Trump last year said Yellen had "done a good job" and said he liked that she's "historically been a low-interest-rate person." He still declined to nominate her for a second term as Fed chair, choosing Powell instead.

Powell has downplayed concerns about Trump's politicizing the Fed.

"We have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns," Powell said in a radio interview last week with "Marketplace."

Powell added that "no one in the administration has said anything to me that really gives me concern on this front."

West Lafayette
Clear
66° wxIcon
Hi: 89° Lo: 65°
Feels Like: 66°
Kokomo
Clear
64° wxIcon
Hi: 85° Lo: 64°
Feels Like: 64°
Rensselaer
Clear
64° wxIcon
Hi: 83° Lo: 64°
Feels Like: 64°
Fowler
Clear
66° wxIcon
Hi: 86° Lo: 66°
Feels Like: 66°
Williamsport
Clear
65° wxIcon
Hi: 88° Lo: 65°
Feels Like: 65°
Crawfordsville
Clear
63° wxIcon
Hi: 87° Lo: 63°
Feels Like: 63°
Frankfort
Partly Cloudy
63° wxIcon
Hi: 86° Lo: 63°
Feels Like: 63°
Delphi
Clear
66° wxIcon
Hi: 88° Lo: 64°
Feels Like: 66°
Monticello
Clear
66° wxIcon
Hi: 89° Lo: 67°
Feels Like: 66°
Logansport
Clear
63° wxIcon
Hi: 86° Lo: 63°
Feels Like: 63°
Record heat expected over the weekend.
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 749097

Reported Deaths: 13745
CountyCasesDeaths
Marion1030271775
Lake554211006
Allen41613691
St. Joseph36933564
Hamilton36505416
Elkhart29347459
Tippecanoe22849225
Vanderburgh22540400
Porter19313325
Johnson18386387
Hendricks17583317
Clark13190193
Madison13111344
Vigo12602253
LaPorte12385221
Monroe12152175
Delaware10947197
Howard10250225
Kosciusko9609119
Hancock8541144
Bartholomew8158157
Warrick7854156
Floyd7763180
Grant7227179
Wayne7154201
Boone6911103
Morgan6735141
Dubois6211118
Marshall6205116
Cass5989108
Henry5893108
Dearborn588878
Noble579786
Jackson508374
Shelby500697
Lawrence4727121
Gibson444093
Harrison440473
Clinton439855
DeKalb438585
Montgomery433890
Whitley405642
Huntington402181
Steuben398659
Miami392568
Jasper386254
Knox375690
Putnam371860
Wabash360583
Ripley346470
Adams344955
Jefferson335685
White329753
Daviess3028100
Wells294881
Decatur289992
Greene286385
Fayette284664
Posey273735
LaGrange272872
Scott269855
Clay265448
Randolph244683
Washington244534
Jennings235149
Spencer234131
Starke227558
Fountain218347
Sullivan213943
Owen210858
Fulton201542
Jay200832
Carroll193420
Orange188055
Perry186937
Rush175626
Vermillion173544
Franklin170135
Tipton165746
Parke148916
Pike137934
Blackford136032
Pulaski120047
Newton112636
Brown103943
Crawford102316
Benton100814
Martin91415
Warren83515
Switzerland8098
Union72810
Ohio57811
Unassigned0421

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events