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Washington - Trump, Despite Solid U.S. Growth, Says Fed Should Fire Up Crisis-era Stimulus

Published on: April 14, 2019 07:00 PM
By: Reuters
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Washington - President Donald Trump said on Sunday that actions by the U.S. Federal Reserve have nicked U.S. economic growth and stock market gains by perhaps 30 percent, and that it should begin pumping money into the economy as it did during the 2007-2009 recession.

Trump’s latest broadside against the central bank, delivered by Twitter and without citing any evidence, came as European Central Bank head Mario Draghi and other international officials worried that a Fed politicized by potential Trump nominees would rattle a dollar-based global system.

“If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4 percent instead of 3 percent…with almost no inflation,” Trump said.

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“Quantitative tightening was a killer, should have done the exact opposite,” he said, referring to the Fed’s monthly withdrawal last year of up to $50 billion of the bonds it acquired during the worst economic downturn since the 1930s Great Depression.

Trump’s suggestion the Fed return to quantitative easing would put the central bank in the position of adding monetary stimulus and expanding its presence in debt markets in an economy growing solidly and with historically low unemployment.

No one at the Fed, including three Trump appointees on the board of governors and Trump’s handpicked chairman, Jerome Powell, has suggested the U.S. needs the sort of central bank help launched when the economy was in freefall a decade ago, according to minutes of recent Fed meetings.

The Fed has already decided to halt the drawdown of its security holdings as of September after concluding that the size of its asset holdings, likely around $3.5 trillion by that point, would be adequate given the demand by commercial banks to hold central bank reserves, the public demand for cash, and the other uses to which its assets are put.

The Fed raised interest rates four times in 2018, but also has put that process on hold, leaving the target policy rate at a range of between 2.25 and 2.5 percent, still below historical averages.

Trump was angered last fall when a variety of economic risks, which analysts say included slowing growth abroad, Trump’s own trade policies, and communications missteps by Powell, contributed to a more than 20 percent drop in the Dow Jones Industrial Average from October through December.

That loss has been almost completely erased as the Fed shifted gears, and the Dow is now just about 1.5 percent below the record it set on Oct. 3.

Trump remains peeved with Powell, and indicated he wants to name two political allies, economics commentator Stephen Moore and businessman Herman Cain, to fill two open seats on the Fed’s board of governors.



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Read Comments (7)  —  Post Yours »

1

 Apr 14, 2019 at 07:32 PM Cixelsyd_Wnosanoy Says:

Trump is anti animal rights. Male mice should be allowed to marry each other! #gayrights4malemice


(lesbian mice are an abomination)

2

 Apr 14, 2019 at 08:33 PM Al Greenspan Says:

I have to admit the President knows more about the economy than the current fed chairman does.

3

 Apr 14, 2019 at 08:35 PM puppydogs Says:

Reply to #1  
Cixelsyd_Wnosanoy Says:

Trump is anti animal rights. Male mice should be allowed to marry each other! #gayrights4malemice


(lesbian mice are an abomination)

UR a deranged liberal.

4

 Apr 14, 2019 at 08:53 PM Peridontal Expert Says:

Reply to #2  
Al Greenspan Says:

I have to admit the President knows more about the economy than the current fed chairman does.

That's a stupid thing to say. Trump is 100% microeconomics, like any good businessman (it's a good thing for a businessman).

5

 Apr 14, 2019 at 09:12 PM Anonymous Says:

Reply to #2  
Al Greenspan Says:

I have to admit the President knows more about the economy than the current fed chairman does.

He knows it better. Bankrupt 7 times. Started 32 companys, 29 closed. He really thinks this is a Casino.

6

 Apr 14, 2019 at 09:26 PM PaulinSaudi Says:

Free money for everyone! What could possibly go wrong?

7

 Apr 15, 2019 at 06:46 AM Phineas Says:

Reply to #2  
Al Greenspan Says:

I have to admit the President knows more about the economy than the current fed chairman does.

He believes in borrowing and then renegotiating or defaulting. Not how the U.S. economy runs.

8

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