President Donald Trump kept up the pressure on the Federal Reserve, calling Tuesday for the central bank to enact a substantial interest rate cut.
The call, made during an exchange with reporters, comes as the policymaking Federal Open Market Committee convenes for its two-day meeting, during which it is widely expected to approve a 25 basis point cut in the central bank’s benchmark overnight funds rate.
“I’d like to see a large cut, and I’d like to see quantitative tightening immediately stopped,” Trump said, the latter remark a reference to the Fed’s efforts to reduce the bonds it is holding on its $3.85 trillion balance sheet.
“They moved in my opinion far too early and far too severely, and puts me at somewhat of a disadvantage,” he added.
Trump said he thinks the Fed should have acted sooner to cut and believes the economy would have been better off without the rate hikes that began in December 2015.In total, the Fed increased rates nine times in an effort to normalize monetary policy from the extreme accommodation implemented during and after the financial crisis.
Despite his disapproval of the Fed’s actions, Trump said he thinks the economy is strong enough to withstand tighter monetary policy.
“Fortunately, I’ve made the economy so strong that nothing is going to stop us,” he said.
However, he repeated previous assertions that the Dow Jones Industrial Average would be 10,000 points higher and GDP growing by 4% had the Fed not tightened.
“I’m very disappointed in the Fed. I think they acted too quickly by far,” Trump said.