Published 11:19 AM EDT Sep 11, 2019
President Donald Trump on Wednesday blasted the Federal Reserve, saying in a name-calling tweet that the central bank should lower interest rates to zero or possibly even below zero.
The president posted consecutive tweets bashing the Fed and Fed Chairman Jerome Powell, saying the “bonehead” officials are missing “a once-in-a-lifetime opportunity” to boost the economy with rate cuts.
“The USA should always be paying the lowest rate,” Trump said on Twitter. “No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing.”
American presidents have typically shied away from criticizing the Fed or commenting publicly on monetary policy decisions for fear of rattling investors or being seen as exerting undue influence. But Trump has bucked convention, choosing to air his grievances regularly.
The president’s tweets come amid concern in some quarters about the prospect of a recession, though few economists expect an immediate downturn. Powell last week said the Fed is not currently projecting a recession.
Jerome Powell: Fed is not ‘at all’ expecting a recession, saying economy continues to ‘perform well’
“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” Trump said on Twitter. “INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term.”
Trump said it would be doable because of the country’s “great currency, power, and balance sheet.”
Powell has declined to directly address Trump’s taunts.
”We’re completely and totally focused on our jobs,” he said last week in a panel discussion. “That’s all we’re going to focus on.”
Central banks in Europe and Japan have set negative interest rates at times in recent years, nudged along by slow economic growth and low inflation. Under negative interest rates, the borrower is actually making money.
Economists caution that negative rates can make it difficult to jump start the economy and can hamper people’s ability to save for retirement.
An industry conference, Jamie Dimon, CEO of JPMorgan Chase, said bank officials have begun discussing which fees and charges it could add if interest rates slide to zero or even lower, according to the Wall Street Journal.
July interest rate cut: Despite a solid economy, Fed cuts its key rate by quarter point to ward off a recession
The Fed in July lowered interest rates for the first time in a decade
George Rusnak, co-head of global fixed income strategy at Wells Fargo Investment Institute, recently predicted two more quarter-point cuts by the end of the year. The current benchmark rate is 2% to 2.25%.
Powell last week said that the Fed would do what’s necessary to sustain the nation’s economic expansion, likely signaling a rate cut next week.
Contributing: Paul Davidson
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.