US President Donald Trump on Wednesday lashed out at Federal Reserve Chairman Jerome Powell for not signaling the start of “a lengthy and aggressive rate-cutting cycle,” shortly after the Fed announced its first interest rate cut since the 2008 global financial crisis.
“As usual, Powell let us down,” the U.S. president said in a tweet. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”
The Federal Open Market Committee (FOMC), the Fed’s rate-setting body, trimmed the target for the federal funds rate by 25 basis points to a range of 2 percent to 2.25 percent after concluding its two-day policy meeting, in line with market expectation.
“Through the course of the year, weak global growth, trade policy uncertainty, and muted inflation have prompted the FOMC to adjust its assessment of the appropriate path of interest rates,” Powell said at a press conference Wednesday afternoon.
Calling it a “mid-cycle adjustment” to the central bank’s monetary policy, Powell said the rate cut is “not the beginning of a long series of rate cuts.” The stock market plunged after his remarks.
“What the market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world,” Trump said.
The U.S. president added that “at least he is ending quantitative tightening, which shouldn’t have started in the first place — no inflation,” referring to the Fed’s decision to conclude its balance sheet runoff in August, instead of at the end of September as previously scheduled.
Trump has repeatedly voiced his criticism of the Fed’s monetary policy over the past few months, and just earlier this week, the president demanded a larger rate cut. Powell, meanwhile, has stressed the Fed’s commitment to independence.
“We never take into account political considerations. There’s no place in our discussions for that,” said the central bank chief at the press conference. “We don’t conduct monetary policy in order to prove our independence. We conduct it in order to move as close as possible to our statutory goals.”