President Trump lashed out at the Federal Reserve on Wednesday over its decision to raise interest rates, as he reprised his earlier threats to cut off a broad swath of U.S. trade unless the central bank bows soon to his demands to lower borrowing costs.
Speaking to reporters, Mr. Trump acknowledged that he had spoken with Kevin M. Warsh, his newly confirmed Fed chairman, at some point before the Fed board voted unanimously to lift rates by a quarter of a percentage point for the first time in three years.
“I told Kevin, I said, you might as well vote with the board because it’s just not going to matter,” Mr. Trump said. “The board is very hostile. They’re very political. They’re doing the wrong thing. They’re a bunch of politicians. They are people put on by politicians.”
Mr. Trump spared Mr. Warsh from direct criticism, even as he admonished other Fed governors for failing to cut rates. In doing so, the president also revived his earlier eyebrow raising ultimatum to choke off a vast swath of U.S. trade unless Fed slashes borrowing costs, which could exacerbate inflation and make the cental bank’s job even more difficult.
“If we wanted to get rid of deficits, which we could do with the swipe of the pen with every country, we’d make a trillion and a half dollars a year,” Mr. Trump said. “We’d pay off our debt. We’d do all sorts of things. But we haven’t chosen to do that. But at some point, we will. Interest rates are too high.”
The attacks marked the latest eruption in Mr. Trump’s ongoing feud with the nation’s central bank, a politically independent institution at the heart of the U.S. economy. In a bid to force down rates, the president has consistently ratcheted up his attacks — and now seems willing to leverage international commerce to secure his desired outcome on monetary policy.
The pressure campaign has continued even after Mr. Trump successfully installed Mr. Warsh as the new chairman of the Fed earlier this year. The Fed chairman, for his part, declined to discuss Mr. Trump’s threats at a news conference earlier Wednesday.
Ahead of the Fed meeting, White House officials tried to walk a fine line.
On one hand, Mr. Trump and his aides had praised Mr. Warsh, insisting that they respected his work to address a set of challenges that includes the battle against inflation. But, at the same time, the president continued to question the political motivations of other Fed members, part of an effort by Mr. Trump to downplay the fact that inflation remains well above policymakers’ 2 percent target.
“Whatever he does tomorrow, we’re going to respect the process, and understand that he’s doing what he and the committee think is correct,” Kevin Hassett, the director of the White House National Economic Council, said in reference to Mr. Warsh during an appearance on CNBC earlier this week.
“That said,” Mr. Hassett continued, “we also don’t think that in a democracy that one is not allowed to talk about policy and economics.”
But Mr. Trump did more than talk about the merits of rates when he issued his boldest threat in early September. Repeating his demand for the “the LOWEST RATE of any country in the World,” the president posted to social media at the time: “LOWER THE RATE OR I’LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT.”
If Mr. Trump followed through, the move would imperil a significant amount of U.S. trade, and the consequences could be immense for American families and businesses. Yet Mr. Trump ignored the concerns this month, later telling reporters: “And if we’re not going to be treated properly, we’re going to do that.”
The comment had no effect on the Fed, which ultimately raised rates on a unanimous vote on Wednesday, prompting Mr. Trump to reprise his attacks. Returning to social media, he argued that the country is “BOOMING,” then claimed the United States could make more money if it stopped trading with certain countries.
“The word ‘Deficit’ is nothing more than a fancy word for LOSS,” Mr. Trump said.
The president continued the attack as he headed to a rally in North Carolina. “They’re raising that only for political reasons, and that’s a raise against Trump,” he told reporters.
Before Wednesday, other White House officials had been coy about the president’s intentions. Appearing Sunday on CNN’s “State of the Union,” Mr. Hassett revealed little about whether the president intends to follow through with his threat.
“I don’t expect that trade is going to go to zero,” he began, “but I do think that the president has a very strong opinion that interest rates could be a lot lower. And we will just have to wait and see what the Fed decides.”
The post Trump Renews Attacks on Fed After Rate Increase appeared first on New York Times.
