Kudlow says Trump respects Fed despite blaming bank for stock meltdown

Kudlow says Trump respects Fed despite blaming bank for stock meltdown
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The top White House economic adviser on Thursday said that President TrumpDonald John TrumpFacebook releases audit on conservative bias claims Harry Reid: 'Decriminalizing border crossings is not something that should be at the top of the list' Recessions happen when presidents overlook key problems MORE was not giving orders to the Federal Reserve when he said the bank had “gone crazy” with “ridiculous” interest rate hikes.

National Economic Council Director Larry Kudlow told reporters that Trump’s fierce criticism should not be seen as an attempt to influence the independent central bank. The president on Wednesday blamed the Fed for spurring a massive stock market slide earlier that day, insisting the bank “is going loco.”

“He has his views,” Kudlow said Thursday of Trump. “But he’s not saying to them, ‘Change your plan, do this differently.’ None of that stuff. He knows the Fed is independent and he respects that.”

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Trump has frequently criticized the Fed and its chairman, Jerome Powell, for a series of planned hikes meant to bring interest rates back toward historically neutral levels. Unlike most Republicans and right-leaning economists, Trump prefers the Fed to keep rates at a lower level to stimulate further job growth.

With unemployment near record lows, the Fed is seeking to raise interest rates quickly enough to prevent the economy from overheating and spurring rapid inflation. Trump has dismissed those concerns and said Wednesday that the Fed rate hikes were unnecessary.

Rising interest rates are one of several factors spooking investors, and U.S. stocks suffered on Wednesday their worst losses since February. The Dow Jones Industrial Average sunk 3 percent, while the Nasdaq and S&P 500 fell lost 4 percent and 3.3 percent each.

Trump blamed the Fed for Wednesday’s market meltdown despite saying earlier in the day that the losses were an expected correction. Economists and analysts are bracing for the market to come back to earth after several years of skyrocketing share prices under Trump.

Kudlow said Thursday that he agreed with Trump’s first explanation of the stock slump, and would not be taking emergency action to stabilize markets.

“As he said yesterday, this is a long-overdue correction. He said that. I happen to agree with that, by the way,” Kudlow said.