Tag: Jerome Powell

Trump targets ‘pathetic’ Federal Reserve after worst manufacturing reading in a decade

President Donald Trump again attacked the Federal Reserve on Tuesday after the weakest U.S. manufacturing reading in 10 years.

In a tweet, the president wrote Fed Chair Jerome Powell and the central bank “have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected.” He contended the Fed has set interest rates “too high.”

“They are their own worst enemies, they don’t have a clue,” he wrote. “Pathetic!”

As his trade war with China rages on, Trump has repeatedly blamed the Fed’s interest rate policy for concerns about a slowing U.S. economy. He has contended the central bank has not moved quickly enough to ease monetary policy — though the Fed has cut its benchmark funds rate twice this year.

The Fed did not immediately respond to a request to comment.

Trump’s tweet comes after the Institute for Supply Management’s manufacturing reading fell to 47.8 in September, down from 49.1 in August. A reading below 50 shows a manufacturing contraction.

The poor economic data contributed to major U.S. stock indexes sliding Tuesday.

The dollar index, which measures the U.S. currency against a basket of global currencies, has climbed more than 3% this year and sits near its highest level since mid-2017. A stronger dollar relative to global currencies is generally expected to reduce exports and increase imports, hurting manufacturers because it makes their products more expensive overseas.

While exchange rates may have contributed to the drag on manufacturing in September, trade also did, according to ISM.

“Global trade remains the most significant issue as demonstrated by the contraction in new export orders that began in July 2019. Overall, sentiment this month remains cautious regarding near-term growth,” Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee, said in a release announcing the data.

Trump has repeatedly downplayed any concerns about a looming American recession. He has also contended his trade conflict with the second-largest economy in the world will not harm businesses or consumers — despite indications that it has already started to hurt some companies and worry Americans.

Seeing concerns about a flagging economy as a ploy to discredit him before the 2020 election, Trump has claimed the central bank bears the blame for any slowdown rather than his own policies.

[NBC News]

Media

Trump calls Fed Chairman Jay Powell ‘enemy,’ compares him to Chinese President Xi

President Donald Trump significantly ramped up his criticism of Fed Board Chairman Jay Powell on Friday, describing his longtime target on economic issues as an “enemy” and likening him to Chinese President Xi Jinping.

“My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?,” Trump wrote, misspelling Powell’s name. 

Trump has repeatedly blasted the Fed, even before his election. But his long-standing dissatisfaction with the Fed, which he accuses of bungling the U.S. economy, has increased amid concerns over a global economic slowdown. Trump nominated Powell as chairman in 2017.

The president’s tweet came as he prepares to head to France on Friday for the G-7 meeting of world leaders, where trade and the economy will be atop the agenda. 

The Fed, an independent board whose members are appointed by the president, raises interest rates to cool down a hot economy and cuts them to stimulate a sluggish one. The rates affect how much it costs to use a credit card, sign a car loan or buy a home.

Trump this week has upped the ante in his year-long campaign to browbeat the Federal Reserve into slashing rates, calling for the central bank to lower its key short-term rate by “at least” a full percentage point “over a fairly short period of time.”

For good measure, he has added that the move should be accompanied by “perhaps some quantitative easing as well,” referring to the Fed’s massive bond purchases during and after the Great Recession to lower long-term rates. 

Trump again voiced frustration with the Fed on Wednesday, tweeting that Germany “is actually being paid to borrow money, while the U.S., a far stronger and more important credit, is paying interest.”

[USA Today]

Trump hammers Federal Reserve, cites commentary from Fox Business

President Trump on Wednesday spent a portion of the day at his New Jersey golf club blasting the Federal Reserve as stocks took a dive amid signs of a potential recession.

The president sent three tweets over a 90-minute span in which he quoted multiple Fox Business Network personalities who echoed Trump’s criticisms of the central bank and defended Trump’s tariff policy toward China.

Trump expressed agreement with Mark Grant, a guest on Stuart Varney’s show who suggested the Federal Reserve should act to boost the U.S. economy.

“Correct! The Federal Reserve acted far too quickly, and now is very, very late. Too bad, so much to gain on the upside!” Trump tweeted.

He later shared comments from Fox Business host Charles Payne, who criticized Federal Reserve Chairman Jerome Powell for his handling of the central bank.

“I agree (to put it mildly!)” Trump tweeted.

He also referenced a quote from Varney’s program which downplayed concerns over the ongoing trade war between the U.S. and China, arguing it had yet to negatively impact the American economy.

Stocks sank sharply Wednesday morning after the U.S. bond market signaled an impending recession. The dip came one day after Trump announced he would delay further tariffs on Chinese imports until after the bulk of the holiday shopping season, reflecting mounting fears that the trade war could derail the robust U.S. economy.

In a pair of tweets later in the afternoon, Trump emphasized that “China is not our problem,” saying the trouble lies with the Fed.

Trump is at his golf club in Bedminster, N.J., for the week, and he had no public events listed on his schedule for Wednesday. He has repeatedly hammered the Fed and Powell for its decisions to raise or lower interest rates, arguing that its decisions have held back the economy. 

“This guy has made a big mistake,” Trump said Tuesday at an event in Pennsylvania, referring to Powell. “He’s made a big mistake — the head of the Fed. That was another beauty that I chose.”

The constant critiques have worried critics, who note the central bank has historically been independent of politics.

[The Hill]

Trump parrots Lou Dobbs in flip-flopping attack on his own Fed chairman

On Wednesday night, President Donald Trump quoted Fox Business’ Lou Dobbs’ attack on Federal Reserve Chairman Jerome Powell for cutting interest rates — ironically, something that he has spent the past several months demanding that Powell should do:

Trump has been at odds with Powell ever since he appointed him to the role in 2018, accusing him of trying to stifle the economy.

[Raw Story]

Trump mocks Fed’s Powell: ‘He’s trying to prove how tough he is’

President Donald Trump on Wednesday flayed the chairman of the Federal Reserve, mocking Jerome Powell’s insistence that he won’t bow to political pressure when determining monetary policy.

“We have a man that doesn’t do anything for us,” Trump said in an interview on Fox Business Network’s “Mornings with Maria,” contrasting Powell’s decision to hike interest rates with the policies of places like China and Europe.

Trump has repeatedly hammered Powell over his rate hikes, prompting the Federal Reserve chairman to say in a speech on Tuesday that he would resist the political pressure emanating from the White House and the president’s Twitter feed.

A day after Trump accused Powell of acting like a “stubborn child” for not cutting interest rates last week, Powell defended the central bank’s insulation from politics — a signature facet of the U.S. financial system — saying that Congress aimed to avoid “the damage that often arises when policy bends to short-term political interests.”

Trump argued to host Maria Bartiromo on Wednesday that Powell “should’ve never raised the [interest] rates to the level that he raised them,” complaining that the Fed was constraining economic growth. And when Bartiromo brought up Powell’s remarks, the president responded with ridicule.

“So now he’s trying to prove how tough he is because ‘he’s not gonna get pushed around,’” Trump said mockingly. “Here’s a guy — nobody ever heard of him before, and now, I made him, and he wants to show how tough he is.”

And though Powell has halted rate hikes for the time being, saying last week that the Fed stands ready to cut rates, Trump continued to ratchet up his criticism. “Let him show how tough he is — he’s not doing a good job,” Trump said, adding that he was being “nice about it.”

Trump constantly complains that Powell has not pursued the easy money policies employed by countries like China, claiming that Beijing devalues its currency to keep the U.S. from negotiating trade deals on a level playing field.

His frequent criticisms have fueled rumors that Trump may try to fire or demote Powell, something he denied Wednesday even as he insisted he has the right to do so.

“I have the right to demote him, I have the right to fire him,” Trump said.

He then said the Fed is doing the opposite of what the European Central Bank under President Mario Draghi is doing and joked: “We should have Draghi instead of our Fed person.”

Draghi, whose term at the ECB ends on Oct. 31, earlier this month said that if the eurozone’s economic situation deteriorates in the coming months the bank would announce further stimulus measures.

The euro dropped 0.2 percent against the dollar within minutes of Draghi’s remarks, which caught the attention of Trump, who tweeted: “Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.”

Shortly after Trump added: “European Markets rose on comments (unfair to U.S.) made today by Mario D!”

[Politico]

Trump might have renominated Yellen for Fed chair if she wasn’t so… short

President Donald Trump might have reappointed Janet Yellen to head the Federal Reserve if only she was a few inches taller.

A Washington Post report that quoted current and former officials said Trump on multiple occasions discussed giving Yellen another term at the central bank but was concerned over her height. He feared that at 5 feet and 3 inches she just wasn’t tall enough to get the job done.

The report said he expressed his misgivings to National Economic Council members and noted that Yellen “impressed [Trump] greatly” during their interview.

There have been some tongue-in-cheek comparisons made in the past to the height of Fed chairs and their propensity to raise rates, with 6-foot-9 Paul Volcker being the most aggressive. Powell is close to 6 feet tall.

Trump has been harshly critical of the Fed as its been run under Jerome Powell, whom he chose over Yellen. The president has objected to the interest rate increases under Powell, though Yellen also presided over hikes and the beginning of the reduction in the Fed’s balance sheet.

“Look, I took recommendations. I’m not blaming anybody,” Trump told the Post, despite reports that he blames Treasury Secretary Steven Mnuchin for recommending Powell.

[CNBC]

Trump blasts Fed chair over stock market slide, GM layoffs

President Trump on Tuesday blamed Federal Reserve Chairman Jerome Powell for a string of negative economic developments, including the stock market’s recent slide and General Motors’s plan to shutter U.S. factories and lay off thousands of workers.
“I’m doing deals and I’m not being accommodated by the Fed,” Trump said in an interview with The Washington Post. “They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me.”
The comments mark an escalation of Trump’s criticism of Powell, whom he nominated last year to lead the central bank, over rising interest rates. They also indicate the president does not believe he bears responsibility for the negative economic news this week.

“So far, I’m not even a little bit happy with my selection of Jay,” Trump told the Post. “Not even a little bit. And I’m not blaming anybody, but I’m just telling you I think that the Fed is way off-base with what they’re doing.”
Trump has blasted Powell frequently since July for continuing a series of Fed interest rate hikes that began in December 2015. The Fed has raised rates eight times since the end of 2015, six times during Trump’s term and three times since Powell took over the central bank in February.
Trump is one of few Republican politicians and right-leaning officials opposed to the Fed’s efforts to bring interest rates back toward historically neutral levels. The president says he believes the Fed should keep interest rates low to stimulate the already-strong economy.
Interest rate hikes also suppress stock market gains — Trump’s preferred economic scorecard — by raising the price of borrowing and narrowing corporate profit margins.
U.S. stocks have erased their 2018 gains amid a Wall Street sell-off triggered in part by rising rates, along with fading economic growth and the mounting costs of Trump’s tariffs.
The president, however, expressed confidence that the U.S. economy would not enter a recession.
The president has repeatedly pointed to strong economic growth as evidence his policies, such as tax cuts and deregulation, are working.
GM’s announcement this week that it plans to cut 15 percent of its North American workforce could pose a political threat to Trump heading into the 2020 elections. Two plants it plans to shutter are located in Ohio and Michigan, two states Trump won in 2016.