Trump attacks Fed, doubles down on call for ‘big rate cut’

President Trump attacked the Fed in an overnight tweet, and called again for a large cut in interest rates, writing: “Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so.” “Our Federal Reserve has us paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!”

Australia cut rates yesterday, and the European Central Bank and Bank of Japan have also signaled rate cuts.

Federal Reserve Chairman Jerome Powell issued a brief statement last Friday in which he said that the fundamentals of the U.S. economy remain strong, but the Fed is monitoring the economic effects of the coronavirus outbreak. “We will use our tools and act as appropriate to support the economy.” See the full statement. However, earlier that day, St. Louis Fed President James Bullard said in a speech that for the time being, monetary policy was fine due to previous rate cuts.

Meanwhile, the OECD has reduced its estimate of global growth, and Goldman Sachs believes there will be zero corporate earnings growth in 2020, in contrast to the consensus.

Most expect the Fed to ease policy in March, anticipating a 25 basis point cut, with some, such as Bank of America, predicting a 50 basis point cut.

This is not the first time President Trump has attacked the Fed Chairman or called for rate cuts. Yesterday, President Trump said the Fed has been slow to act. The day before, he called for the Fed to cut rates, and on Friday he said he hopes the Fed will ‘get involved soon’ over markets.

https://seekingalpha.com/news/3547867-trump-attacks-fed-doubles-down-on-call-for-big-rate-cut