By Agence France-Presse
President Donald Trump criticized the US central bank in comments aired Thursday, saying its course of interest rate increases counteracted his efforts at growing the economy.
The rare rebuke was likely to stir a backlash, as it broke with the long-established practice of the executive branch not commenting on the Federal Reserve’s decisions out of respect for its independence.
“I’m not thrilled,” Trump told CNBC in an interview excerpt aired Thursday. “Because we go up and every time you go up they want to raise rates again.”
“I’m not happy about it. But at the same time I’m letting them do what they feel is best.”
A Fed spokesman declined to comment on Trump’s remarks but referred a reporter to comments Powell made this month in public radio interview in which he said he was “not concerned” by any threat to central bank’s independence.
Hoping to keep a lid on inflation as the world’s largest economy gathers pace, the Fed has raised its benchmark lending rate seven times since 2015 and expects two more rate hikes this year.
Doing so slows growth, as it raises the cost of borrowing, but can also prevent runaway inflation from damaging the economy.
Trump said higher interest rates left the United States at a disadvantage when compared to the European Union and Japan, where easy money policies persist.
The dollar index turned negative following the release of Trump’s remarks, which were excerpted from a longer interview due to air Friday morning.
Couldn’t care less
The Fed is now chaired by Trump appointee Jerome Powell, whom Trump described as “a very good man.”
Economists say state intervention in the affairs of central banks can have disastrous consequences, leading to hyper-inflation and devalued currencies.
Trump has taken credit for robust US economic performance since his election and championed December’s sweeping tax cuts.
But, with unemployment at historic lows and inflation on the rise, Powell has said the US economy is strong enough to weather the interest rate increases.
In congressional testimony this week, though, he expressed concern about Trump’s confrontational trade policies.
A number of factors, including inflation and higher interest rates, could soon counteract the fiscal stimulus, however, and economists say the risk of recession in the coming years is growing.
Trump said he was unconcerned that his remarks might spark criticism as he was merely stating long-held personal views.
“So somebody would say, ‘Oh, maybe you shouldn’t say that as president.’ I couldn’t care less what they say because my views haven’t changed,” he told CNBC.
“I don’t like all of this work that we’re putting into the economy and then I see rates going up.”