Trump heaps pressure on Fed ahead of likely rate cut

Trump heaps pressure on Fed ahead of likely rate cut
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President TrumpDonald John TrumpWarren unveils Native American policy plan Live-action 'Mulan' star spurs calls for boycott with support of Hong Kong police Don't let other countries unfairly tax America's most innovative companies MORE on Tuesday boosted pressure on the Federal Reserve to slash interest rates this week, calling for a “large cut” to counter a series of hikes in 2018.

Trump continued his assault ahead of the independent central bank’s policymaking meeting in Washington, which will start Tuesday. 

The Fed is expected to announce at least a modest reduction of interest rates Wednesday amid slowing global growth and fading U.S. business investment. 

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"I'm very disappointed in the Fed,” Trump told reporters Tuesday morning.

"I would like to see a large cut, and I'd like to see immediately the quantitative tightening stop,” he added, referring to Fed’s ongoing sale of bonds purchased during the financial crisis.

Trump again accused the Fed and its chairman, Jerome Powell, of hindering his economic agenda by raising rates seven times under his watch.

"The Fed moved, in my opinion, far too early and for too severely. It puts me at a — somewhat of a disadvantage,” Trump said. “Fortunately I've made the economy so strong that nothing's going to stop us. But the Fed could have made it much easier."

Trump has been quick to blame a recent slowdown in U.S. growth on the Fed while calling on the bank to cut rates. Even so, some of the Fed’s rationale for cutting rates is based in economic threats exacerbated by Trump’s trade agenda.

While the U.S. still enjoys a strong labor market and booming consumer spending, businesses have pulled back amid looming recessions in Europe and China, along with the rising damage of Trump’s trade wars.

U.S. gross domestic product (GDP) grew at an annualized rate of 2.1 percent between April and June, well below the 3.1 percent growth rate notched in the first three months of 2019.

Productivity-boosting business investment declined 0.6 percent in the same period, while exports sunk 5.2 percent, showing a sharp decline in global demand for U.S. goods. 

“When businesses become uncertain about the future and about future demand,” Powell told lawmakers on July 10, “they may decide to wait before they build something or buy something, and they may just hold off.

“There's no perfect way to identify these things,” Powell added. “But we do connect that to trade policy uncertainty, and also uncertainty about global growth and weak manufacturing around the world.”

Brett Samuels contributed.