President Donald Trump, who called this week for a “large” cut in the Federal Reserve’s benchmark interest rate, said on Wednesday that Chairman Jerome Powell “let us down” by delivering a quarter-point reduction.
Trump, who’s relentlessly attacked the politically independent Fed for keeping borrowing costs too high, tweeted that financial markets were looking for the “beginning of a lengthy and aggressive rate-cutting cycle” after Powell indicated that wouldn’t necessarily happen.
While the president delivered a thumbs-down verdict after the rate decision, he did credit Powell for halting the Fed’s offloading of its securities portfolio, known as quantitative tightening, earlier than expected. The Fed said Wednesday it will halt the balance-sheet shrinking as of Aug. 1, instead of at the end of September as previously scheduled.
….As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!
— Donald J. Trump (@realDonaldTrump) July 31, 2019
Trump has had the central bank in his crosshairs since last year, when it raised interest rates four times. He’s not the only elected leader applying more pressure on monetary officials who are supposed to be insulated from politics. It’s happening in countries from Turkey to India — leading some investors and economists to fret about the future of central-bank independence.
Trump’s frustration reached a point where he began asking aides about his ability to oust the Fed chief, in discussions reported by Bloomberg News on Dec. 21.