Trump blames Fed, says US manufacturers hurt by dollar
President Trump’s patience is wearing even thinner when it comes to the Federal Reserve.
In the latest slap, Trump took aim at the Fed again on Thursday, criticizing the U.S. central bank for having a “high interest rate level” compared to other nations and said that as a result, a higher dollar was hurting U.S. manufacturers.
“One would think that I would be thrilled with our very strong dollar,” Trump wrote in a tweet. “I am not! The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing, John Deere, our car companies, & others, to compete on a level playing field.”
The Fed most recently lowered its benchmark interest rate last week by a quarter point, to a range of 2 percent to 2.25 percent, which is a historic low. When the Federal Reserve announced the cuts last week, Trump voiced his displeasure via Twitter and took aim at the central bank’s chairman, Jerome Powell, who has held the post since early 2018 after being nominated by the president.
This week, at least four global central banks rolled out easing policies including New Zealand, Thailand, India and the Philippines.
The Philippine central bank cut its benchmark interest rate by 25 basis points on Thursday. On Wednesday, New Zealand’s central bank cut its official cash rate 50 basis points to a record low of 1 percent, which was larger than expected. The Bank of Thailand followed suit, cutting its one-day repurchase rate by 25 basis points to 1.5 percent and the Reserve Bank of India cut rates by 35 basis points, the fourth time it’s eased its monetary policy this year.
Meanwhile, Trump added that the central bank has “called it wrong at every step of the way,” and said that without quantitative tightening and if the Fed made “substantial” interest rate cuts, U.S. businesses would be able to “win against any competition.”
“With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition,” Trump tweeted. “We have the greatest companies in the world, there is nobody even close, but unfortunately the same cannot be said about our Federal Reserve. They have called it wrong at every step of the way.”
The president’s comments on Thursday come just one day after he targeted the Fed, calling, once again, for the central bank to make rate cuts “bigger and faster” and claiming it doesn’t understand global competition facing the U.S.