Cohn defends rate hikes, says Trump shouldn't attack Fed

Cohn defends rate hikes, says Trump shouldn't attack Fed
© Greg Nash

Former top White House economic adviser Gary CohnGary David CohnOn The Money: Shutdown Day 27 | Trump fires back at Pelosi by canceling her foreign travel | Dems blast 'petty' move | Trump also cancels delegation to Davos | House votes to disapprove of Trump lifting Russia sanction Gary Cohn criticizes the shutdown: 'Completely wrong' Ocasio-Cortez rips presence of lobbyists at orientation event MORE said Thursday that the Federal Reserve is right to be hiking interest rates and that President TrumpDonald John TrumpTrump claims media 'smeared' students involved in encounter with Native American man Al Sharpton criticizes Trump’s ‘secret’ visit to MLK monument Gillibrand cites spirituality in 2020 fight against Trump’s ‘dark’ values MORE should not criticize the independent central bank.

Cohn, the former director of the National Economic Council, said in a CNBC interview that the Fed is “doing exactly what they’re supposed to do” by gradually raising interest rates and that Trump should leave the bank alone.

"The Fed is doing their job as an independent agency," Cohn said. "I don't think he should make comments on any independent agency."

Cohn is the latest former senior government official to speak out against Trump’s escalating attacks on the Fed. The president has blasted the Fed since July for raising interest rates toward neutral levels and easing off stimulative monetary policy, calling the bank his “biggest threat” in a Tuesday interview.

The Fed is aiming to raise interest rates slowly enough to allow the economy to expand to its fullest sustainable potential, but quickly enough to prevent inflation and financial instability. The bank has raised rates eight times since 2015, six times under Trump and three times since Fed Chairman Jerome Powell took over in February.

Trump had considered appointing Cohn to be Fed chairman, but their relationship soured in the aftermath of the president’s controversial response to the deadly 2017 United the Right rally in Charlottesville,Va. Cohn, who is Jewish, reportedly offered his resignation to Trump in August 2017 after the president blamed “both sides” for violent clashes spurred by white supremacists that left one counterprotester dead.

Trump appointed Powell, then a Fed governor, to replace former Fed Chairwoman Janet YellenJanet Louise YellenTrump fight with Fed blows over Overnight Energy: House Dem to offer measure backing Paris climate deal | Former Federal Reserve chiefs call for carbon tax | Watchdog urges agencies to update climate guidance Former Federal Reserve chairs, economists, back carbon tax MORE last October. Yellen has also condemned Trump’s criticism of the central bank, calling it “essentially damaging to the Fed and to financial stability.”

Cohn left the White House in March as Trump imposed tariffs on imported steel and aluminum, which Cohn fiercely opposed. Trump has since levied tariffs on $250 billion in Chinese goods and is mulling import taxes on foreign automobiles.

"Anything that raises the price of a good doesn't make sense for our economy," Cohn said Thursday of the tariffs. "Even if they're paying it to the government as a tariff, it's just another tax."