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Trump complains over Fed chair Powell interest rates at GOP fundraiser

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donald trump jerome powell
President
Donald Trump and Federal Reserve Chair Jerome
Powell.

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  • President Donald Trump reportedly complained about
    Federal Reserve Chair Jerome Powell and the central bank’s
    recent interest rate hikes during a fundraiser in Southampton,
    New York on Friday.
  • Trump was displeased with Powell’s decision to raise
    interest rates, according to Bloomberg.
  • This is not Trump’s first criticism of Powell and the
    Fed. The president publicly questioned the interest rate hikes
    in July.

President Donald Trump reportedly privately attacked Federal
Reserve Chairman Jerome Powell’s interest rate hikes during a GOP
fundraiser Friday.

According to Bloomberg, Trump complained
that Powell — the president’s own pick for the Fed’s top job —
was raising interest rates instead of delaying rate hikes and
keeping monetary policy loose.

Trump was attending a private fundraiser with GOP donors at the
Southampton, New York home of Howard Lorber, chairman of iconic
hot dog company Nathan’s Famous. Chicago Cubs co-owner Todd
Ricketts, Commerce Secretary Wilbur Ross, Treasury Secretary
Steven Mnuchin, and White House adviser Jared Kushner were also
there, according to Bloomberg.

The Fed has been gradually raising interest rates since the end
of 2015, with five hikes coming under Trump. While economic
theory (in the simplest terms) says that rate hikes slow the pace
of economic growth, interest rates today remain historically low
and measures of credit growth show that access to loans is still
generally easy.

This isn’t the first time Trump has
taken exception to the Fed’s
gradual interest rate hikes. In
July, the president bashed the rate hikes during an
interview with CNBC
but also praised Powell as a good person.
Trump followed up those comments with further complaints on
Twitter.

The Federal Reserve operates independently of the government in
order to make interest rate decision that are good for the
economy in the long run but may be politically unpopular.

Presidential meddling in monetary policy has a troubling history,
most notably
President Richard Nixon’s insistence
that the Fed keep
interest rates low ahead of the 1972 election. Economists said
the pressure helped create the stagflationary economy of the
1970s.

During the previous episode of Fed criticism, the White House
maintained that Trump respected the central bank’s independence.

“Of course the President respects the independence of the Fed,”
White House spokeswoman Lindsay Walters told Business Insider at
the time. “As he said he considers the Federal Reserve Board
Chair Jerome Powell a very good man and that he is not
interfering with Fed policy decisions.”

Despite Trump’s expressed desire for lower interest rates, the
president has so far appointed members of the Fed’s Board of
Governors that appear to be in line with Powell’s thinking on the
need for hikes. Typically, the greatest influence a president has
over the Fed
is the appointment of governors
.

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