President Donald Trump on Wednesday called on the Federal Reserve to slash U.S. interest rates “down to ZERO,” admonishing chairman Jerome Powell and other leaders of the U.S. central bank as “Boneheads.”
“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” Trump tweeted. “INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet.”
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The Wednesday morning post marked the first time Trump has publicly suggested negative interest rates, a step the U.S. has never taken but has been implemented in Japan and some European nations. Such a move would likely exhaust much of the Federal Reserve’s firepower to fight a future recession at a time when the U.S. economy is still growing.
The president continued his rant in another post, writing: “The USA should always be paying the the lowest rate. 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. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”
Trump has leveled increasingly harsh broadsides against his handpicked Federal Reserve chief in recent weeks, as Powell has declined to explicitly pledge the campaign of aggressive rate cuts the president has sought.
After Powell pledged last month that the Fed would “act as appropriate” to support the record-long U.S. economic expansion, but did not hint at an imminent reduction in rates, Trump savaged the chairman on Twitter — pondering whether Powell or China’s communist leader Xi Jinping was America’s “bigger enemy.”
Trump has also complained about U.S. interest rates in relation to those of other countries, claiming that fellow heads of government at last month’s G-7 summit in Biarritz, France, were indeed “giddy” about their interest costs, and charging that the Fed “cannot ‘mentally’ keep up with the competition” abroad.
Trump’s intense criticisms of the Fed chairman come as the U.S. economy stares down financial warning signs indicating a possible recession, but Powell said last week the central bank is “not forecasting or expecting” such a crisis.
Victoria Guida contributed to this report.