Trump bashes Powell, says he's 'waited long enough' for rate cut

Trump bashes Powell, says he's 'waited long enough' for rate cut
© Stefani Reynolds

President TrumpDonald John TrumpTrump administration eyes proposal to block jet engine sales to China: report Trump takes track to open Daytona 500 Brazile 'extremely dismayed' by Bloomberg record MORE escalated his criticism of Federal Reserve Chairman Jerome Powell in an interview that aired Friday, saying he’s “waited long enough” for the Fed to cut interest rates.

In an interview with ABC’s George StephanopoulosGeorge Robert StephanopoulosWhile Klobuchar surges, Warren flounders The Hill's Morning Report - Sanders, Buttigieg do battle in New Hampshire Democrats ramp up attacks on opponents in final pitch before New Hampshire MORE, filmed Tuesday, the president again accused Powell of holding back the economy from its full potential through interest rate hikes and bond sales meant to stave off inflation.

“He's my pick,” Trump said. “And I disagree with him entirely.”

Trump argued that the U.S. economy and stock market would have grown faster “if we had a different person in the Federal Reserve that wouldn't have raised interest rates so much.”

“It's OK to raise interest rates a little bit,” Trump said. “But so much ... it would have been even better.”

The Fed has raised interest rates nine times since 2015 and seven times since Trump took office in 2017. Trump nominated Powell to chair the Fed in November of that year, and the central bank has raised rates four times since the president’s hand-picked chairman was confirmed in February 2018.

Trump has bashed Powell and the Fed for nearly a year, shattering decades of protocol on how the White House and administration address the independent central bank. The president has frequently voiced and tweeted his frustration with the Fed for raising interest rates and selling bonds despite the persistence of relatively low inflation.

The Fed was designed to foster full employment and stable prices by setting appropriate interest rates independent of political considerations. While many previous Fed chairs faced private pressure from presidents, Powell has taken an unprecedented level of public criticism from Trump.

When asked if he was concerned about putting Powell "in a box," Trump replied, "Yes ... but I'm gonna do it anyway, because I've waited long enough."

Trump reportedly weighed firing Powell in December amid a massive stock market sell-off, but experts say he lacks the legal authority to do so over a policy difference. Powell has also said that Trump does not have the power to fire him and he would not resign if the president asked him to step down.

Powell has brushed off Trump’s criticism, insisting that politics play no role in the Fed’s decisionmaking. But the president’s latest attack intensifies the spotlight on the Fed as it weighs whether to cut interest rates.

Fed officials have expressed concern over the persistence of inflation below the central bank’s 2 percent target and the rising costs of Trump’s trade battles with China, the European Union, Mexico, Canada and Japan.

Powell said last week that the Fed “will act as appropriate to sustain the expansion” as inflation remains low and the economy faces headwinds abroad. Analysts and investors saw Powell’s comments as a nod to an impending rate cut following months of the chairman stressing the bank’s “patient” approach to moving rates.

The Fed’s policymaking arm, the Federal Open Markets Committee, will meet Tuesday and Wednesday for its monthly huddle. While the Fed is not expected to cut rates next week, Powell’s press conference and the committee's statement may shed light on the central bank’s next moves.