President Donald Trump on Monday
renewed his attacks on the Federal Reserve, calling the central bank the “only
problem” in the economy.
“They don’t have a feel for the
Market, they don’t understand necessary Trade Wars or Strong Dollars or even
Democrat Shutdowns over Border,” Trump said in a Twitter post Monday morning
ET. “The Fed is like a powerful golfer who can’t score because he has no touch
- he can’t putt!”
The latest Twitter post riffs on a
previous theme the president expressed prior to the Federal Open Market
Committee’s meeting last week. Just hours before Fed officials convened last
Tuesday, Trump said he hoped “the people over at
the Fed” would “feel the market” before “they make yet another mistake,” or
decide to raise rates again.
The Federal Reserve announced
to raise its benchmark interest rate for the fourth time in
2018 last week, upping the new band 25 basis points to between 2.25% to 2.5%.
Trump’s statements extend a months long attack on
the central bank, with Jerome Powell – the Fed Chairman Trump himself had
appointed – at the center of his ire. Equity markets have been stricken with
volatility since the Federal Reserve’s third rate hike this year in September.
Stocks tumbled yet again after last Wednesday’s rate hike decision, which
with commentary signaling the central bank would be continuing
its current process toward balance sheet normalization.
The excess market volatility
a concern for Trump in a 2020 presidential reelection bid.
Public perception of a sitting president is often closely tied to the strength of the
economy and stock market during a presidential term.
Trump has reportedly discussed
firing Powell given his frustration in the Fed’s monetary policy path as of
late, Bloomberg reported late last week. According to
the report, unnamed people close to the president have warned him that such a
move would be disastrous, and could undercut investor confidence in a central
bank unswayed by political motivations. Powell has stressed in public
statements that the central bank continues to function independently.
Treasury Secretary Steven Mnuchin
attempted to extinguish concerns over Powell’s future in a series of Twitter posts over the weekend. Mnuchin said he
spoke with Trump and quoted the president as having said, “I never suggested
firing Chairman Jerome Jay Powell, nor do I believe I have the right to do so.”
continued to tumble as Trump made his latest comments. The S&P 500 is on
track for its fourth consecutive session of declines and is inching toward a
bear market, a threshold of 20% off its recent highs that the Nasdaq reached on
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