The Federal Reserve interest rate increases and the continuing efforts to shrink the US money supply are not only hurting the economy but are also helping China offset the impact of tariffs on exports to the United States, US President Donald Trump said in an interview on Monday
WASHINGTON (Pakistan Point News / Sputnik - 10th June, 2019) The Federal Reserve interest rate increases and the continuing efforts to shrink the US money supply are not only hurting the economy but are also helping China offset the impact of tariffs on exports to the United States, US President Donald Trump said in an interview on Monday."They made a big mistake. They raised interest rates far too fast," Trump told CNBC in reference to four increases in a key interest last year.
Trump also criticized the Federal Reserve for continuing to pull $25 billion from the US money supply each month with a policy known as quantitative tightening.
As a result, Trump said, the Federal Reserve has put the United States at a disadvantage in a trade conflict with China because President Xi Jinping can direct his country's central bank to offset the impact of US tariffs on more than $200 billion in Chinese goods.
"We should be entitled to have a fair playing field, but even without a fair playing field - because our Fed is very, very destructive to us - even without a fair playing field, we're winning, because the tariffs are putting us at a tremendous competitive advantage," Trump said.
The Federal Reserve's policy setting panel meets next week amid expectations by many economists that the central bank will announce a rate cut in response to early indications that the US economic expansion has begun to weaken.
In addition, Federal Reserve Chairman Jerome Powell has stressed that the central bank will be patient and wait to see how the economy develops as a tariff-based trade war with China progresses.
Powell has repeatedly emphasized that the Federal Reserve does not respond to political pressure in setting policy.
