By Catherine Lucey
WASHINGTON -- President Trump renewed his call for lower interest rates and his criticism of the Federal Reserve Wednesday, saying on Twitter that the Fed should reduce rates to "ZERO, or less."
He said the U.S. should always be paying the lowest rate and complained that the "naivete" of Chairman Jerome Powell and the Fed means that this was a "once in a lifetime opportunity that we are missing because of 'Boneheads.'"
A Fed spokeswoman declined to comment on the tweets.
After cutting their benchmark interest rate in July by a quarter percentage point, Fed officials are gearing up to cut rates again, likely by another quarter point, at their Sept. 17-18 policy meeting.
Mr. Powell, who has defended the Fed's independence from political pressure, framed the July decision to lower the Fed's benchmark short-term rate to a range between 2% and 2.25% as a "mid-cycle adjustment."
The global growth and trade outlook has deteriorated since then amid an escalation in the trade war with China.
The comments by Mr. Trump mark the latest escalation of his unprecedented attack on the Fed and Mr. Powell, who the president picked for the post in 2017.
The president said last month that the Fed should cut its benchmark interest rate by at least a full percentage point and resume its crisis-era program of buying bonds to lower long-term borrowing costs. Such moves would typically be considered only when the economy faces a substantial downturn.
Wednesday's comments are the first time Mr. Trump has called for rates below zero. In response to a reporter's question several weeks ago, Mr. Trump said he didn't want negative rates.
Yields in some countries including Germany, France and the Netherlands have fallen below zero already. On Tuesday, JPMorgan Chase & Co. Chief Executive James Dimon said the bank has begun discussing what fees and charges it could introduce if interest rates go to zero or lower. Even during the last recession, the Fed didn't employ negative rates.
President Trump and White House officials have said they don't believe the U.S. is headed toward a slowdown, but also have floated other ideas, such as tax cuts, to boost the economy.
A rate cut of the magnitude Mr. Trump is calling for hasn't happened since the global financial crisis in late 2008.
In comments last week, Mr. Powell said the U.S. economy faced a favorable outlook despite significant risks from weaker global growth and trade uncertainty.
--Paul Kiernan contributed to this article.
Write to Catherine Lucey at firstname.lastname@example.org
(END) Dow Jones Newswires
September 11, 2019 09:18 ET (13:18 GMT)
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