President Donald Trump said the U.S. Federal Reserve should lower interest rates and take other unconventional measures to ease pressure on an economy that he said they slowed down, Trend reported citing Reuters.
“I think they should drop rates,” Trump told reporters. “I think they really slowed us down. There’s no inflation.”
The U.S. president also suggested that the central bank pursue an unconventional monetary policy called “quantitative easing” that was used to nurse the economy back after the global financial crisis. The technique used from 2008 to 2014 involved buying trillions of government-sponsored bonds.
“It should actually now be quantitative easing,” Trump said.
Trump’s repeated public attacks on Fed policy and his intention to nominate two political allies to the central bank’s board of governors has led some analysts to see the economic policymaker’s cherished independence as under attack. The White House has said it does not wish to undermine the central bank’s independence.
The renewal of quantitative easing, Trump said, should be in addition to interest rate cuts - a likely worrying thought, at this point, for Fed officials who describe such a combination of tactics as only appropriate in a dire downturn.
On Thursday, Trump said he plans to nominate his political ally Herman Cain, the former head of Godfather’s Pizza, to one of two vacancies on the Fed’s seven-member Board of Governors. Cain runs a political fundraising group that has spent more than half its money supporting Trump’s reelection.
Two weeks ago, Trump said he would nominate conservative economic commentator Stephen Moore to the other vacant seat on the Fed’s board. Moore is also a longtime Trump ally who has joined him in criticizing last year’s rate hikes.
The president’s top economic adviser, Larry Kudlow, told Bloomberg News that both potential nominees share the view that strong growth does not necessarily cause inflation, which central bankers try to prevent by raising rates.
Half a dozen Fed officials in recent days have touted the underlying strength of the American economy and argued a recent spate of weak data on business activity is more likely to prove fleeting than lasting. None said they currently back a rate cut and some have said rate hikes may eventually be necessary.
But a Fed chaired by a Trump appointee, Jerome Powell, has stopped raising rates after four hikes last year, saying that there are enough economic risks, including a slowdown in Europe and China, to warrant patience. The Fed’s policy rate is currently between 2.25 and 2.5 percent.