The Federal Reserve announced a third straight rate cut Wednesday – but the reduction wasn’t steep enough to suit President Donald Trump.
Trump has been calling for a drastic reduction in rates for months, even urging the Fed to cut rates to below zero. The central bank, meanwhile, has steadily reduced rates a quarter-point at a time over its last three meetings. Interest rates currently sit at 1.5% to 1.75%.
Wednesday’s rate cut didn’t satisfy the president, however.
“People are VERY disappointed in Jay Powell and the Federal Reserve,” Trump wrote in a tweet Thursday. “The Fed has called it wrong from the beginning, too fast, too slow.”
According to Trump, Wednesday’s quarter-point cut won’t do enough to help the US economy compete.
“Others are running circles around (the Fed) and laughing all the way to the bank,” Trump tweeted. “Dollar & Rates are hurting our manufacturers. We should have lower interest rates than Germany, Japan and all others.”
Bringing US interest rates lower than rates in all other countries would require a cut so deep that rates would be negative – a move that could result in borrowers getting paid to take out a mortgage. Savers, however, would actually end up spending money to have a savings account.
While some countries – including Japan – have been experimenting with negative interest rates, their benefit is still largely theoretical. Several countries that have tried negative interest rates have seen their economies worsen, and only one – Sweden – saw a modest improvement, market watcher Jack Derwin said in an August think piece in Business Insider.
While economic activity has been rising at “a moderate pace,” business fixed investment and exports remain weak, and there has been global economic uncertainty in recent months, driven largely by the ongoing trade dispute between the US and China. Still, Trump blamed the Fed, not the trade dispute, for any economic problems.
“We are now, by far, the biggest and strongest Country, but the Fed puts us at a competitive disadvantage,” he tweeted. “China is not our problem, the Federal Reserve is!”
This isn’t the first time the president has blasted the central bank and its chairman, Jerome Powell. After the September rate cut, Trump blasted Fed officials as having “No ‘guts,’ no sense, no vision” for not cutting rates further. He has repeatedly attacked Powell – whom he appointed to the position – for not cutting rates more aggressively.