President Donald Trump criticized the Federal Reserve on Monday for raising interest rates too quickly and giving the Chinese an upper hand in trade negotiations.
“They devalue their currency, they have for years: It’s put them at a tremendous competitive advantage. And we don’t have that advantage because we have a Fed that doesn’t lower interest rates,” Trump told CNBC’s Joe Kernen on “Squawk Box.” “We should be entitled to have a fair playing field, but even without a fair playing filed — because our Fed is very, very disruptive to us — even without a fair playing field we are winning.”
“Don’t forget: the head of the Fed in China is President Xi … he can do whatever he wants,” Trump said.
The president has often blasted Fed Chair Jerome Powell and other central bank members for their move to hike interest rates four times in 2018, a move that made borrowing more expensive for banks and other corporations. Trump had frequently held Powell accountable, saying last year that he’s “not even a little bit happy with” Powell and thinks the Fed is “way-off base” with its monetary policy.
As recently as December, Trump discussed firing Powell because of widespread losses in the stock market in the last three months of 2018.
Criticism of the Fed is rare from a sitting president, with prior president taking a softer tone or refraining from weighing in on the direction of the central bank’s monetary policy. In breaking with his more restrained predecessors, Trump has blamed the Fed and its leader for swings in the stock market and undermining trade deliberations with Beijing.
“It’s more than just Jay Powell — we have people on the Fed that really weren’t — they’re not my people. But they certainly didn’t listen to me because they made a big mistake: They raised interest rates far too fast,” Trump added Monday. “That’s No. 1.”
“No.2: they did quantitative tightening: They were taking in $50 billion a month. Fifty billion a month. And they’ve now eased that, but it’s still $25 billion a month, which is ridiculous. Now, China’s doing just the opposite. They’re pumping money in. So I’m winning, but I’m not winning on a level table,” he said.