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 CohnThe Hill's 12:30 Report — Sponsored by Delta Air Lines — Trump says Florida races should be called for GOP | Latest on California wildfires | Congress set for dramatic lame duck On The Money: Mnuchin pulls out of Saudi summit | Consumer bureau to probe controversial blog posts on race | Harris proposes new middle-class tax credit Cohn defends rate hikes, says Trump shouldn't attack Fed MORE said Thursday that the Federal Reserve is right to be hiking interest rates and that President TrumpDonald John TrumpAvenatti ‘still considering’ presidential run despite domestic violence arrest Mulvaney positioning himself to be Commerce Secretary: report Kasich: Wouldn’t want presidential run to ‘diminish my voice’ 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 YellenThe Hill's 12:30 Report — Sponsored by Delta Air Lines — Trump says Florida races should be called for GOP | Latest on California wildfires | Congress set for dramatic lame duck On The Money: US workers see highest wage growth since 2008 | Fed releases plan to loosen rules for major US banks | GOP chair criticizes UK tech tax | US drops in World Bank's list of best places to do business On The Money: Trump threatens more tariffs if no 'great deal' with China | Chamber warns against tax targeting tech companies | Dow bounces back | Consumer confidence rises in October 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."