Trump assails Fed as the 'only problem our economy has'


President Donald Trump lashed out at the Federal Reserve on Monday after administration officials spent the weekend trying to assure the public and financial markets that Jerome Powell’s job as Fed chairman was safe.

“The only problem our economy has is the Fed,” the president tweeted Monday. “They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch — he can’t putt!”

On Wall Street, stocks had already been down but intensified their fall after Trump’s tweet. Markets are facing their worst month in a decade over fears about a U.S. trade war with China, a slowing global economy and chaos in the Trump White House. By the close of a holiday-shortened trading session Monday, the Dow Jones Industrial Average had sunk 653 points for the day — 2.9 percent.

Trump’s latest tweet attacking the Fed was met with concern that any effort to diminish Powell or remove him as chairman could destabilize the economy.

“He is seeking open warfare on Christmas Eve,” said Peter Conti-Brown, a financial historian at the Wharton School of the University of Pennsylvania. “We’ve never seen anything like this full-blown and full-frontal assault. This is a disaster for the Fed, a disaster for the president and a disaster for the economy.”

Elon Musk Warns Taylor Swift as Singer Takes Shot at 'Chads, Brads and Dads'

The president has expressed frustration over the Fed’s decision to raise its key short-term rate four times this year. Those moves are intended to prevent the economy from overheating at a time of brisk growth and an unemployment rate near a half-century low.

At a news conference last week, Powell explained that the rate hikes were evidence of the economy’s strength. But Trump sees the increases — which lead to higher borrowing costs for consumers and businesses — as an economic and political threat.

The president’s attacks are widely seen as an intrusion on the political independence of the Fed, which exists to determine the flow of money based off economic data on employment and inflation.

Fed independence has long been among the bedrocks of the U.S. financial markets. It ensures that central bankers can make politically unpopular decisions, such as fighting high inflation in the 1980s or rescuing banks after the 2008 financial crisis.

Sen. Richard Shelby of Alabama, a senior Republican on the Banking Committee, has cautioned against removing Powell.

“I’d be very careful doing that,” Shelby told reporters Saturday at the Capitol. “The Federal Reserve is set up to be independent.”

Stocks did decline after Powell announced this year’s fourth rate hike on Wednesday. But the sell-off appeared to reflect concerns that the Fed might be moving too fast in its plans to raise rates and to shrink its vast portfolio of bonds given an economic slowdown that is expected in 2019.

Fed officials voted unanimously to increase rates last week. Among those voting with Powell were three other board members who were chosen by Trump: Richard Clarida, Randal Quarles and Michelle Bowman.

The president expressed his displeasure Monday with the Fed after Treasury Secretary Steve Mnuchin had tweeted on Saturday that Powell’s job was safe. Mnuchin also tweeted on Sunday that he had checked with the heads of the six largest U.S. banks to ensure that they had enough liquidity to operate in a stock market that has tumbled sharply since October.

Presidential Elections of 1944 and 2024 Have Staggering Similarities

“My sense is the Mnuchin tweets don’t tell us much about the economy, but they provide unusual insight into the chaos inside the White House,” said Joseph Brusuelas, chief economist at the consultancy RSM. “Rather than instilling confidence, it created confusion and raised more questions than it answered. Foremost among those is, how safe is the job of Jay Powell as chairman of the Federal Reserve?”


AP chief congressional correspondent Lisa Mascaro contributed to this report.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →

We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands. Photo credit: @AP on Twitter
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
New York City