Trump blasts Fed chair over stock market slide, GM layoffs
President Trump on Tuesday blamed Federal Reserve Chairman Jerome Powell for a string of negative economic developments, including the stock market’s recent slide and General Motors’s plan to shutter U.S. factories and lay off thousands of workers.
“I’m doing deals and I’m not being accommodated by the Fed,” Trump said in an interview with The Washington Post. “They’re making a mistake because I have a gut, and my gut tells me more sometimes than anybody else’s brain can ever tell me.”
The comments mark an escalation of Trump’s criticism of Powell, whom he nominated last year to lead the central bank, over rising interest rates. They also indicate the president does not believe he bears responsibility for the negative economic news this week.{mosads}
“So far, I’m not even a little bit happy with my selection of Jay,” Trump told the Post. “Not even a little bit. And I’m not blaming anybody, but I’m just telling you I think that the Fed is way off-base with what they’re doing.”
Trump has blasted Powell frequently since July for continuing a series of Fed interest rate hikes that began in December 2015. The Fed has raised rates eight times since the end of 2015, six times during Trump’s term and three times since Powell took over the central bank in February.
Trump is one of few Republican politicians and right-leaning officials opposed to the Fed’s efforts to bring interest rates back toward historically neutral levels. The president says he believes the Fed should keep interest rates low to stimulate the already-strong economy.
Interest rate hikes also suppress stock market gains — Trump’s preferred economic scorecard — by raising the price of borrowing and narrowing corporate profit margins.
U.S. stocks have erased their 2018 gains amid a Wall Street sell-off triggered in part by rising rates, along with fading economic growth and the mounting costs of Trump’s tariffs.
The president, however, expressed confidence that the U.S. economy would not enter a recession.
The president has repeatedly pointed to strong economic growth as evidence his policies, such as tax cuts and deregulation, are working.
GM’s announcement this week that it plans to cut 15 percent of its North American workforce could pose a political threat to Trump heading into the 2020 elections. Two plants it plans to shutter are located in Ohio and Michigan, two states Trump won in 2016.
– Sylvan Lane contributed
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