Washington
CNN
—
President Donald Trump on Monday continued his extended attack against Federal Reserve Chair Jerome Powell and the central bank’s Board of Governors, calling for ultra-low rates in an intensifying campaign demanding interest rate cuts.
Trump on his social media platform wrote that the Fed’s board “should be ashamed of themselves for allowing this to happen to the United States.” However, officials who sit on the Fed’s board aren’t the only ones who vote on policy moves; that also includes five other regional Fed bank presidents. It’s unclear if Trump meant to attack just the board or all of the Fed officials with voting power.
He posted a chart ranking many of the world’s central banks by the level of their key interest rates, claiming the US has one of the highest. The chart included a note in Trump’s handwriting that criticized Powell directly, saying the Fed chair has “cost the USA a fortune” and that he continues “to do so.”
White House press secretary Karoline Leavitt said in a news conference Monday that Trump sent the chart to the Fed.
“The Board just sits there and watches, so they are equally to blame. We should be paying 1% Interest, or better!” Trump said in his social media post.
For months, Trump has relentlessly slammed Powell, describing him as a “fool,” a “numbskull” and a “stupid person.” Trump’s disdain for Powell, whom he himself appointed in 2018, stretches back to his first term as president — all centered around the Fed not lowering borrowing costs to Trump’s liking.
Trump has said the federal government is stuck paying massive interest rate payments on its debt because the Fed hasn’t lowered rates. Leavitt said that “American people want to borrow money cheaply, and they should be able to do that, but unfortunately, we have interest rates that are still too high.”
While some central banks, such as the European Central Bank and the Bank of Mexico, have lowered their benchmark lending rate a few times this year, the Fed has not. One big reason for that is the major policy shifts since Trump took office. Officials have said they want to see how those changes affect the economy first before considering further rate cuts.
Powell for his part has avoided responding to Trump’s harsh criticism, noting that the Fed is only focused on successfully taming inflation and preserving the labor market’s health. Central bankers don’t consider the government’s finances when determining policy moves.
The Fed leader told Senate lawmakers during a June 24 hearing that “we don’t take into consideration political factors” when setting rates.
This is a developing story and will be updated.
