Mr. Powell led his colleagues to cut short-term interest rates last month and is navigating the Fed toward more rate reductions. On Friday, he is scheduled to speak at the annual central bank conference in Jackson Hole, Wyo. While the president has blamed the state of the economy on the Fed pushing interest rates too high last year, many in business and at the Fed say Mr. Trump’s own trade policies have triggered market jitters and slowed business investment.
Trump Calls for a Big Fed Rate Cut, Again Criticizes Central Bank Chairman
President Trump on Monday called for the Federal Reserve to cut its benchmark interest rate by 1 percentage point, a move that would typically be considered only when the U.S. economy is on the brink of a recession, and again criticized his own central bank chairman for a “horrendous lack of vision.”
In a pair of tweets Monday morning, the latest in a series of attacks Mr. Trump has levied against Fed Chairman Jerome Powell, the president said a combination of a reduced interest rate and a resumption of the Fed’s crisis-era bond-buying stimulus would improve the economy both in the U.S. and globally. “Good for everyone!” Mr. Trump tweeted.
Mr. Trump, who returned Sunday from a 10-day vacation at his golf course in Bedminster, N.J., has repeatedly attacked Mr. Powell for the state of the economy, even as he and his advisers have projected optimism that the decadelong economic expansion will continue. Mr. Trump has repeatedly called on the central bank to lower interest rates more than it has, saying that would further boost growth. U.S. economic growth slowed to 2.1% in the second quarter from 3.1% in the first three months of the year.
Last Wednesday, on a day when the Dow Jones Industrial Average slumped 800.49 points, or 3%, the president spent much of the day attacking the Fed chairman on Twitter.
White House and campaign aides acknowledge privately that a recession would threaten Mr. Trump’s 2020 re-election campaign, which has made a booming economy a central selling point. On Tuesday, the White House has arranged a call in which National Economic Council Director Larry Kudlow is expected to reassure state and local officials about the state of the economy.
Asked in an interview on Fox News about possible economic alarm bells, White House counselor Kellyanne Conway on Monday played down the chance of a slowdown.
“It’s nice to have the mainstream media finally covering the economy, but they only cover it when they can use Sesame [Street’s] Grover word of the day, ‘recession,’ ” she said. Pointing to strong employment numbers, she said the economy’s “fundamentals are very strong.”
The last time the Fed reduced rates by a full percentage point was during the 2008 financial crisis.