Saturday, August 24, 2019
President Donald Trump launched a furious and highly personal Twitter attack Friday against the Federal Reserve and Chairman Jerome Powell, fuming that the Fed once more “did NOTHING!” and wondering who is “our bigger enemy” – Powell or China’s leader.
The outburst came after Powell, speaking to central bankers in Jackson Hole, Wyo., gave vague assurances that the Fed “will act as appropriate” to sustain the nation’s economic expansion. While the phrasing was widely seen as meaning interest rate cuts, he offered no hint of whether or how many reductions might be coming the rest of the year.
Powell had barely finished speaking before Trump escalated his criticism of the Fed, which he has repeatedly accused of keeping rates too high. For months, the president has ridiculed Powell, the man he picked to lead the Fed.
“As usual, the Fed did NOTHING!” Trump tweeted, adding, “We have a very strong dollar and a very weak Fed.” He went further by saying: “My only question is, who is our bigger enemy, Jay Powel (sic) or Chairman Xi?” – a reference to China’s President Xi Jinping.
While the “enemy” remark appeared to elevate Trump’s attacks on the Fed to a new level, Fed officials meeting in Jackson Hole sought to play down the comment.
Fed Vice Chairman Richard Clarida said he had been too busy attending the conference to even look at Trump’s tweets. He said the Fed planned to keep doing its job of pursuing low unemployment and stable prices in spite of Trump’s criticism.
“This is an institution created by the Congress more than 100 years ago,” Clarida said in a CNBC interview. “We have a very clear assignment from the Congress. ... We are just focusing on doing our job.”
Many private economists have expressed growing alarm about Trump’s criticism of the Fed as an intrusion on its independence and a threat to its credibility.
David Jones, a leading historian of the Federal Reserve, said the “enemy” remark set an unfortunate precedent..