President Donald Trump on Friday called on the Federal Reserve to take drastic action to support the U.S. economy, about an hour after new data showed strong jobs numbers and healthy wage growth.
“I personally think the Fed should drop rates,” Trump told reporters outside the White House. “I think they really slowed us down.”
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He also said the central bank should restart its bond-buying program known as “quantitative easing,” a measure taken by the Fed in the wake of the 2008 financial crisis to stop the collapse of the housing market and restart the economy.
Trump is escalating his long-running battle with the Fed, which he has accused of being the “only problem” facing the economy. He pressed Chairman Jerome Powell for months to halt the central bank’s interest-rate-hike campaign, but is now calling on the Fed to stimulate growth. He has also said he intends to nominate two Fed governors who say they support rate cuts.
Since late 2017, the Fed has been shrinking its bond holdings. It also raised interest rates four times last year to keep prices from rising too rapidly and to wean the economy off cheap debt that could eventually start to threaten the stability of the financial system. That rate hike campaign has now been put on hold while the central bank monitors slowing growth abroad.
“There’s no inflation,” Trump said. “I would say in terms of quantitative tightening, it should actually now be quantitative easing. … You would see a rocket ship.”
“Despite that, we’re doing very well,” he added.
U.S. employers added a solid 196,000 jobs in March, in a sign that February’s weak report of 33,000 net jobs were an outlier. Wage growth slowed to 3.2 percent last month from 3.4 percent in February, which was the fastest pace in a decade.
This summer, the current economic expansion will become the longest in U.S. history. The economy grew by 2.9 percent in 2018.
Trump’s sentiments echo a call by his economic adviser, Larry Kudlow, who last week said the Fed should “immediately” cut interest rates by half a percentage point, a view also shared by Stephen Moore, who the president has pledged to nominate to the central bank.