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 CohnTrump mocks wind power: 'When the wind doesn't blow, just turn off the television' On The Money: Senate rejects border declaration in rebuke to Trump | Dems press Mnuchin on Trump tax returns | Waters says Wells Fargo should fire its CEO Gary Cohn says Trump trade adviser the only economist in world who believes in tariffs MORE said Thursday that the Federal Reserve is right to be hiking interest rates and that President TrumpDonald John TrumpTrump mocks wind power: 'When the wind doesn't blow, just turn off the television' Pentagon investigator probing whether acting chief boosted former employer Boeing Trump blasts McCain, bemoans not getting 'thank you' for funeral 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 YellenFemale economists report discrimination, sexual assault in survey Put the final nail in the coffin of 'voodoo economics' Powell to appear on '60 Minutes' with Yellen, Bernanke 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."