The Federal Reserve (Fed) cut its interest rate for the first time in more than a decade on Wednesday, July 31, but it appears that that didn’t satisfy President Donald Trump who wants more aggressive action from the central bank.
The Federal Open Market Committee lowered the benchmark rate by 25 basis points to a range of 2% to 2.25%, its first rate cut since December 2008.
The Fed’s policymaking committee said the current state of economic growth is “moderate” and the labor market is “strong,” but it still decided to loosen policy due to “implications of global developments for the economic outlook as well as muted inflation pressures,” CNBC reported.
Speaking at a press briefing after a two-day meeting, Fed Chairman Jerome Powell noted that the rate cut was simply a “midcycle adjustment to policy” and that Fed did not see the type of marked economic weakness that would necessitate a longer rate-cutting cycle.
The one-quarter percentage-point cut was widely expected, but fell short of expectation for President Trump who had been looking for a 50 basis point cut.
The president expressed his dissatisfaction at the Fed’s interest rate decision as well as its chairman’s comments.
In a couple of tweets later on Wednesday, President Trump said Powell “let us down” with a quarter-point rate cut, saying the market wanted to hear “this was the beginning of a lengthy and aggressive rate-cutting cycle.”
“As usual, Powell let us down,” President Trump said, but added that “at least he is ending quantitative tightening, which shouldn’t have started in the first place—no inflation.”
….As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!
— Donald J. Trump (@realDonaldTrump) July 31, 2019
President Trump continued, “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”
The president then cited experts that said the Fed should not have tightened in the first place, and now as Powell cut the rate to correct the mistake, “Then he started talking.”
Experts stated that the Fed should not have tightened, and then waited too long to undo their mistake. James Bullard of St. Louis Fed said they waited too long to correct the mistake that they made last December. “Mistake, Powell cut rate and then he started talking.” @LouDobbs
— Donald J. Trump (@realDonaldTrump) August 1, 2019