Trump Calls for a Big Fed Rate Cut, Again Criticizes Central Bank Chairman -- Update
August 19 2019 - 12:57PM
Dow Jones News
By Rebecca Ballhaus
WASHINGTON -- 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.
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.
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.
Write to Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com
(END) Dow Jones Newswires
August 19, 2019 12:42 ET (16:42 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.