US president adds to his attacks on central bank, accusing it of ‘insane’ policy

This article is more than 1 year old

This article is more than 1 year old

Donald Trump has launched an extraordinary attack on the Federal Reserve chairman, Jerome Powell, adding to a barrage of recent criticisms of the central bank, which he blames for slowing economic growth.

The US president has previously asserted that he has the power to demote Powell but denied that he had threatened to do so.

Speaking on Wednesday in an interview with Fox Business Network, Trump appeared to mock Powell, whom he chose to chair the Fed.

Trump reportedly discussed firing Fed chair Jerome Powell over rate hikes Read more

Trump said: “He’s decided to prove how tough he is, because he’s not going to get pushed around? Here’s a guy, nobody ever heard of him before. And now, I made him, and he wants to show how tough he is. OK. Let him show how tough he is.

“He’s not doing a good job.”

He added that the Fed’s policy of raising interest rates and cutting back on its bond-buying quantitative easing had gone too far and was “insane”.

Trump also suggested that Mario Draghi, the outgoing president of the European Central Bank, would be a better leader of the Fed than Powell.

The Fed makes its decisions independently from the White House, but Trump has broken with decades of precedent in directly criticising interest rate rises. Higher interest rates make it more expensive to borrow, slowing down economic growth.

Trump said on Monday that without the Fed’s rate rises the Dow Jones industrial average stock market index would be “thousands of points higher”.

He also suggested annual economic growth would have reached 4% or 5% – above the 3.1% annual rate reported by the US Bureau of Economic Analysis for the first quarter of the year.

Trump also raised fears of a new front in his trade disputes with multiple countries, saying Vietnam was “almost the single worst abuser” of the US on trade. The Trump White House has already imposed or threatened major tariffs on China, the EU and Mexico.

He said: “Vietnam takes advantage of us even worse than China.”