Published: Mon, August 12, 2019
Money | By Ethel Goodwin

Fed rate cuts must be bigger

Fed rate cuts must be bigger

He said the Fed needs to lower rates a bit, but followed that up by saying he'd like to see them cut 100 bps.

Last week, U.S. President Donald Trump said a 10% tariff on an additional $300 billion of Chinese goods will be added, starting September 1 and Washington on Monday branded China a currency manipulator.

"Incompetence is a bad thing to watch, especially when things could be taken care of sooo easily", Trump tweeted.

"They must Cut Rates bigger and faster", Trump said in a series of Wednesday morning tweets just one week after the Fed cut the central bank benchmark lending rate for the first time in more than a decade.

The Fed slashed its interest rate last week for the first time in more than a decade, and Trump wants that trend to continue so the US economy will be supercharged by cheap access to money.

"We have the greatest the world, there is nobody even close, but unfortunately the same can not be said of our Federal Reserve", Trump tweeted, adding that "substantial Fed cuts" would make it possible for American companies "to win against any competition".

But economists strongly refute this notion and say it is the strength of the United States economy compared to others like the slowing eurozone, that has pushed up the value of the dollar.

"Our problem is a Federal Reserve that is too proud to admit their mistake of acting too fast and tightening too much (and that I was right!)".

On Wednesday, New Zealand's central bank cut its official cash rate 50 basis points to a record low of 1 percent, which was larger than expected.

While the Fed has yet to move at the pace Trump wants, his recent moves against China may force their hand.

FILE - Federal Reserve Chair Jerome Powell presents the monetary policy report to the Senate Banking Committee on Capitol Hill in Washington, July 11, 2019.

In a three-part tweet, Trump once again called out the central bank for policies that he perceived were stifling further economic growth.

"China used to be killing us with unfair trade deals".

Trump's latest attack repeats a series of complaints for this president, who has broken with nearly 30 years of White House tradition of staying publicly silent on the central bank out of respect for its independence.

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