Trump blasts the Fed over pace of interest rate cuts

Trump blasts the Fed over pace of interest rate cuts

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Fed Chairman Jerome Powell today during his testimony before the Senate Federal Reserve Board's semiannual report to Congress 2018, (Photo ©2018 Doug Christian/TMN)
After Fed Chairman Jerome Powell gave a speech Friday morning, President Donald Trump attacked him on Twitter. (File photo ©2018 Doug Christian/TMN)

WASHINGTON – President Donald Trump blasted the Federal Reserve on Wednesday, saying the central bank was too quick to raise interest rates and too slow to lower rates.

Last month the central bank lowered its federal funds rate from 2.25%-2.50% to 2.0-2.25%. It was first interest rate cut since 2008.

The Fed made four modest rate increases in 2018.

Trump has consistently criticized the Fed and Chairman Jerome Powell over the central bank’s monetary policy. Trump has refuted claims that he is looking to replace Powell.

U.S. allies such Germany and New Zealand have recently made significantly more aggressive rate cuts. Some have even lowered rates to below 1%.

The Fed has generally lowered interest rates when the economy is slow to encourage borrowing. The Fed has generally raised rates when the economy is booming.

Stocks tumbled on Wednesday.

As of 1 p.m. EDT., the Dow Jones Industrial Average (DJIA) had fallen more than 700 points amid analyst projections of a global recession and the ongoing effects of a trade war. The S&P 500 index, which analysts consider the benchmark for stock assessment, fell 2.75%. The NASDAQ index fell 3.05%.

The stock tumble came after the bond market triggered its first recession warning since 2007-the year before the Great Recession devastated world financial markets.

 

 

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