President Trump pointed to interest rate cuts by three foreign central banks Wednesday as proof that the Federal Reserve’s monetary policy, not his trade war with China, is the cause of “our problem.”
Referring to the Fed’s rate hikes last year, Mr. Trump tweeted that “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!).”
The Fed last week announced its first rate cut since 2008, reducing a key lending rate by one-quarter percent. Fed officials cited concerns about a global economic slowdown and trade tensions, and also said they would stop reducing its balance sheet.
Mr. Trump said Wednesday, “They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW.” He had been hoping for a rate cut of at least a half-point.
His comments came after central banks in India, New Zealand and Thailand all announced larger-than-expected cuts to interest rates, adding to a global trend of easing monetary policy.
The president’s tweet implied that the Fed is still carrying out a policy of “quantitative tightening,” or reducing the level of bonds held on its balance sheet. The Fed decided last week to end that program.
As markets pared steep losses Wednesday, Mr. Trump said his trade war with Beijing is not to blame for investors’ jitters.
“Our problem is not China — We are stronger than ever, money is pouring into the U.S. while China is losing companies by the thousands to other countries, and their currency is under siege,” he tweeted.
In comments to reporters Wednesday, Mr. Trump shrugged off the market’s losses of more than 3 percent on Monday, after Beijing moved to devalue its currency.
“I would have maybe anticipated even more [stock market losses], but ultimately, it’s going to go much higher than it ever would have gone, because China was like an anchor on us,” the president said. “China was killing us with unfair trade deals. What they were doing to us for years and years, taking hundreds of billions of dollars out, stealing intellectual property, targeting our farmers, all of that is ending and they understand that.”
On Twitter, the president said of the Federal Reserve, “Incompetence is a terrible thing to watch, especially when things could be taken care of sooo easily.”
“We will WIN anyway, but it would be much easier if the Fed understood, which they don’t, that we are competing against other countries, all of whom want to do well at our expense!” he said.
Chinese negotiators are slated to visit Washington next month for another round of trade talks, although expectations of a deal are fading rapidly.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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