Expanding tax credit for businesses retaining workers gains bipartisan support
Trump: 'Who is our bigger enemy,' Fed chief or Chinese leader?
President Trump ripped Federal Reserve Chairman Jerome Powell on Friday, asking whether his hand-picked Fed chief or Chinese President Xi Jinping was a more dangerous threat to the U.S.
"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work 'brilliantly' with both, and the U.S. will do great," Trump tweeted Friday, following Powell's speech in Jackson Hole, Wyo.
Trump's tweet followed Powell's warning Friday that while the Fed may cut interest rates to support the U.S. economy, it cannot solve the harm created by Trump's trade battles.
In a Friday speech, Powell said the bank would "act as appropriate" to sustain a record stretch of U.S. economic growth, a strong labor market and booming consumer spending. The chairman expressed confidence in the U.S. economy even as signals of an impending recession flash across the globe.
But Powell also warned that while the Fed could try to insulate the U.S. from costly trade tensions, the bank cannot solve the uncertainty and anxiety triggered by the Trump's tariffs.
China on Friday announced that it was imposing reciprocal tariffs on another $75 billion worth of American goods, sending stock prices downward. Trump reacted with fury, pledging to respond "this afternoon."
"Setting trade policy is the business of Congress and the administration, not that of the Fed," Powell said at the Fed's annual summit in Jackson Hole, Wyo.
"While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade."
Trump's snipe at Powell is his latest effort to smear the Fed chairman, whom he appointed to lead the central bank in 2018. Trump has pressed the Fed for more than a year to cut interest rates and stimulate an already solid U.S. economy to give him leverage in trade battles with China and the European Union.
Trump's attacks on Powell have escalated in step with anxiety about a potential recession, which could devastate the U.S. economy and derail the president's re-election bid. He has insisted that the Fed has harmed U.S. markets by keeping interest rates relatively higher than those of other global powers like Europe and China, where growth has fallen sharply.
Powell said Friday that while a "complex, turbulent picture," poses threats to the U.S. economy that may require looser rates in the future, the U.S. economy has continued to perform well overall.
"The outlook for the U.S. economy since the start of the year has continued to be a favorable one," Powell said.
"Business investment and manufacturing have weakened, but solid job growth and rising wages have been driving robust consumption and supporting moderate growth overall."
-Updated at 11:17 a.m.