President Donald Trump blamed the Federal Reserve for mounting fears about a slowing U.S. economy on Wednesday as he defended his administration’s trade war with China.
In a pair of tweets, the president argued the central bank and its “clueless” Chair Jay Powell have dragged on the U.S. economy. He also blamed the Fed for the yield on the 2-year U.S. Treasury moving higher than the yield on the benchmark 10-year Treasury — a possible recession indicator that contributed to U.S. stock indexes dropping more than 2.5% on Wednesday.
“CRAZY INVERTED YIELD CURVE!” the president wrote. “We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!”
Trump also claimed “we are winning, big time” in his administration’s trade conflict with the world’s second largest economy. “China is not our problem,” but rather “our problem is with the Fed” and its interest rate policy, he said.
Trump has repeatedly pushed the Fed to cut its benchmark federal funds rate in recent months as the trade conflict with Beijing has, at times, contributed to stock market chaos and concerns about U.S. economic growth slowing. On Tuesday, he argued the Fed “raised too much” and “too fast” in hiking rates by a quarter of a percentage point seven different times in 2017 and 2018.
He said the central bank is “now too slow to cut” rates. Last month, the Fed decreased the target range on the federal funds rate to 2% to 2.25% — the first time it cut rates since the 2008 financial crisis.
On Tuesday, Trump delayed new tariffs on some Chinese goods that were set to take effect on Sept. 1 until Dec. 15.
He told reporters “we’re doing this for the Christmas season, just in case some of the tariffs would have an impact on U.S. consumers. ” Trump and members of his administration have insisted China would bear the burden of the duties rather than American businesses and consumers.
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