Federal Reserve unlikely to cut rates this month: Scaramucci
Former White House Communications Director Anthony Scaramucci said Sunday he doesn’t expect the Federal Reserve to cut interest rates this month, despite President Trump’s numerous calls for a lower benchmark federal funds rate.
“I don’t think the Fed can cut rates here, given how strong the economy is,” Scaramucci told “Sunday Morning Futures.”
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Trump has repeatedly expressed his desire for the central bank’s chairman, Jerome Powell, to lower rates, which are currently at a range between 2.25 percent and 2.50 percent. The president has continued criticizing the Fed and Powell, most recently Friday evening, calling the central bank the “most difficult problem” the U.S. faces.
“They raised rates too soon, too often, & tightened, while others did just the opposite,” Trump said in a tweet. “As well as we are doing from the day after the great Election, when the Market shot right up, it could have been even better – massive additional wealth would have been created, & used very well. Our most difficult problem is not our competitors, it is the Federal Reserve!”
However, the likelihood of the Fed lowering rates decreased following a strong jobs report released Friday in which the U.S. economy added 224,000 jobs in June, blowing past estimates of 160,000.
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“If he cuts rates, it is going to be very, very good for the stock market, but I’m just worried that it may be too early to start that process, given the strength of the economy,” Scaramucci said. “Remember, he only has got 250 basis points. And you need about 400 basis points of stimulus … to smooth out the sharp edges of a recession. And so he doesn’t have a lot of bullets in the tank.”
Powell will appear before lawmakers on Capitol Hill this Wednesday and Thursday to deliver his Monetary Policy Report to Congress. The Federal Open Market Committee (FOMC) will also release minutes from its June meeting on Wednesday.