Politics & MoneyMortgage

Trump tells “boneheads” at Fed to cut interest rates below 0%

Says the U.S. should always pay lowest rate

In a Twitter rant Wednesday, President Donald Trump said the Federal Reserve should cut interest rates down to zero, or lower.

“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” the President tweeted. “Interest could be brought way down, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet…The USA should always be paying the lowest rate.”

But the President didn’t stop with expressing what he wishes the Fed would do. He also called Federal Reserve Chair Jerome Powell “naïve” and the Federal Reserve members “boneheads.”

“No Inflation!” Trump continued. “It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”

The Federal Reserve is expected to cut rates once again when the Federal Open Markets Committee meets in September. However, Powell disclosed in no uncertain terms that political factors are not playing a role in his decision making.

“The Fed looks set for another 25bp rate cut at next week’s FOMC meeting,” said Andrew Hunter, Capital Economics senior U.S. economist. “The data haven’t yet deteriorated nearly enough to justify a larger 50bp move, although we do expect a further gradual slowdown in economic growth over the coming months to prompt one final 25bp cut in December.”

At the end of its most recent July meeting, the Federal Reserve cut its benchmark rate by a quarter percentage point, and Fed minutes from that meeting showed that more rate cuts are likely through the end of 2020.

Trump, for his part, continues to call for lower rates.

“The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well,” Trump previously tweeted.

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