Trump Calls Fed 'Boneheads,' Demands 'Zero or Less' Rates

Galtero Lara
Setiembre 12, 2019

He has repeatedly blamed the Fed and Chairman Jerome Powell, who goes by Jay, for raising interest rates too steeply in 2018 and constraining the economy as the president pursues a trade war with China.

President Donald Trump urged the Federal Reserve to lower interest rates to a level typically reserved for recessions or periods of persistently weak growth, suggesting that such a setting could allow the government to restructure Treasury debt at a lower cost. As the sun rose on Wednesday's anniversary of the 9/11 terrorist attacks, Trump tweeted, "It is only the naivete 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" ".

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Trump said Wednesday interest rates should be zero or negative and that the USA should refinance its more than $US22 trillion in debt.

In addition, CNBC reports that during his 2016 campaign, Trump suggested a plan involving renegotiating debt, but the idea was dismissed by experts who said it could drive Treasury yields higher while threatening the us dollar as the world's reserve currency and causing problems with the country's standing with creditors. The rate now is in a range of 2% to 2.25%. Trump has pushed to bring the rate down to be more in line with that of other nations, which have interest rates of nearly zero percent. Policymakers are unlikely to cut to the extent the White House wants, since interest rates are already low by historical standards.

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