President Donald Trump on Tuesday further ramped up pressure on the Federal Reserve to slash interest rates amid the coronavirus outbreak, as U.S. and global leaders continued to search for ways to mitigate the international economic fallout from the public health crisis.
“Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so,” Trump wrote on Twitter in a pair of early morning messages.
“Our Federal Reserve has us … paying higher rates than many others, when we should be paying less,” he continued. “Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!”
The president’s posts come hours before a planned interagency meeting led by the White House’s National Economic Council to discuss the coronavirus’ effect on the U.S. economy.
Financial ministers and central bankers of the Group of Seven major economies are also expected to hold a teleconference Tuesday morning to coordinate a response to the outbreak.
Trump previously pummeled Fed Chairman Jerome Powell in a tweet Monday, charging that the U.S. central bank chief was “slow to act” in the face of the coronavirus threat and urging him to cut rates.
“Germany and others are pumping money into their economies. Other Central Banks are much more aggressive,” the president wrote. “The U.S. should have, for all of the right reasons, the lowest Rate. We don’t, putting us at a … competitive disadvantage. We should be leading, not following!”
Powell said during an appearance before Congress last month that he did not see a need to adjust U.S. rates, telling lawmakers that “the current stance of monetary policy will likely remain appropriate.”
But Powell also acknowledged that the emergence of the coronavirus “could lead to disruptions in China that spill over to the rest of the global economy,” and cautioned that “there will “very likely be some effects on the United States.”
But after stock market anxieties related to the outbreak resulted last week in Wall Street’s worst week since the Great Recession of 2008, Powell signaled that the Fed might cut rates at its meetings in mid-March.
“The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy,” Powell said in a statement.
That potential intervention by the central bank contributed Monday to a stock market rebound, with the Dow Jones Industrial Average surging to a 5.1 percentage point increase — the greatest one-day percentage gain since 2009.
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