WASHINGTON — President Donald Trump is calling on the Federal Reserve to cut interest rates by at least a full percentage point “over a fairly short period of time,” saying that such an action would make the U.S. economy even better and would also “greatly and quickly” enhance the global economy.
In two tweets Monday, Trump kept up his pressure on the Fed and its chairman Jerome Powell, saying the U.S. economy was strong “despite the horrendous lack of vision by Jay Powell and the Fed.”
Powell is Trump’s hand-picked choice for the top Fed job.
He said Democrats were trying to “will” the economy to deteriorate ahead of the 2020 election.
Trump administration officials in recent days have sought to calm worries about a potential U.S. recession that were heightened by last week’s steep stock-market decline.
The Fed on July 31 cut its key policy rate for the first time in more than a decade, reducing it by a quarter-point to a range of 2% to 2.25%. It cited a number of “uncertainties” that were threatening the country’s decade-long expansion, from Trump’s trade battles to slowing global growth.
Economists and investors will be closely watching a speech Powell will give Friday at the Fed’s annual conference in Jackson Hole, Wyo., for signals of whether the central bank is prepared to embark on a series of rate cuts to energize the U.S. economy.
Over the past year, Trump has kept up a steady drumbeat of attacks on Powell.
In addition to calling for the Fed to cut rates by a full percentage point, Trump also said the central bank should consider supplying “quantitative easing” as well, the term economists use to describe the Fed’s efforts to restart economic growth over the 2007-2009 recession by buying bonds to lower long-term interest rates.
The Fed did announce in July that it would halt its program to shrink its bond holdings this month, two months earlier than planned. But officials have given no indication that they are considering another round of bond purchases to increase the size of their balance sheet.