Trump continues to put pressure on the Fed to lower interest rates while the board prepares to meet and the president says that China and the E.U. take smarter steps to benefit from the US
- The Federal Reserve board meets on Wednesday and Trump wants a substantial interest rate cut
- He says that Europe and China are reducing interest rates to stimulate their economies
- Trump has become impatient with Fed Chairman Jerome Powell
- Fed raised interest rates only 7 months ago and Trump hurls Powell for the move
- Shares opened just outside record highs, as traders were expecting an interest rate cut between a quarter and a half percentage points
Donald Trump pulled out on the Federal Reserve board of directors on Monday and renewed his demand that they lower interest rates when they meet this week.
He tweeted that the board is likely to do very little & # 39; in comparison with a trend of interest rate decline in the E.U. and China that puts the American economy at a competitive disadvantage.
& # 39; The European Union. and China will further lower interest rates and pump money into their systems, making it much easier for their manufacturers to sell products & he said. & # 39; Meanwhile, and with very low inflation, our Fed is not doing anything. & # 39;
The Fed is ready to lower interest rates for the first time since the Great Recession ten years ago, strengthening US defense as the world economy weakens.
President Donald Trump praised the Federal Reserve on Monday for an interest rate cut expected Wednesday, and destroys the Fed's administration for a slow approach to lowering interest rates
The president tweeted about the Federal Reserve on Monday and threw the central bank as a barrier to a strong US economy in the fastest Nimbler countries overseas
It marks a striking face for the central bank and returns an interest rate increase announced just seven months ago. Trump took the time to pour salt into the wounds of Fed Chairman Jerome Powell, insisting that the earlier move was foolish.
& # 39; The Fed is way too early and way too much & # 39; brought up & # 39 ;. Their quantitative tightening was another big mistake. Although our country is doing very well, the potential wealth creation that was missed, especially compared to our debt, is staggering, & tweet Trump in a second widescreen.
Quantitative tightening is a process whereby the Fed shrinks money supply, usually by buying huge amounts of bonds issued or guaranteed by the US Treasury.
The opposite, quantitative easing occurs when the board sells those bonds on the market again, reducing its own stock.
Trump has often destroyed Fed Chairman Jerome Powell and said he has the power to remove him if he does not like monetary policy; that would probably lead to a legal battle that could scare markets
Trump believes other countries are more adept at managing the amounts of money that come in and out of their financial systems, and the interest rates that borrow and trade in bonds.
& # 39; A small interest rate cut is not enough, but we will still win! & # 39; he tweeted Monday.
A quarter point interest rate cut is almost a foregone conclusion, according to economists in a Reuters survey who expect a second cut later in the year.
Expectations in the July 16-24 poll for the first rate cut in more than a decade have solidified after several Fed members have strongly suggested that policy easing is coming quickly, pushing US equities to new record highs.
He has become increasingly impatient with Powell, which he believes can be replaced at will. Wednesday's announcement, if the interest rate cut isn't big enough to please Trump, could offer him a platform to find out.
& # 39; I have the right to downgrade him. I have the right to dismiss him, & Trump said last month, warning that he & # 39; never suggested doing this.
The Federal Reserve, often & # 39; the Fed & # 39; is the US central bank. It is its mission to provide the nation with a safe, flexible and stable financial system and to manage the money supply
Every step to expel Powell would probably hit a legal battle with major consequences on the financial markets.
US equities would open Monday just outside the record highs and pause at the start of a week that is likely to be dominated by the Fed statement on Wednesday
The S&P 500 and Nasdaq indices closed at a record high on Friday, as the positive earnings from Google mother Alphabet and Starbucks Corp closed a strong week for US retailers and tech companies.
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