President Donald Trump on Wednesday called on the Federal Reserve to slash U.S. interest rates “down to ZERO,” admonishing chairman Jerome Powell and other leaders of the U.S. central bank as “Boneheads.”
“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” Trump tweeted. “INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet.”
The morning message marked the first time the president has publicly suggested negative interest rates, a step the U.S. has never taken but that has been implemented in Japan and some European nations. Such a move would likely exhaust much of the Federal Reserve’s firepower to fight a future recession at a time when the U.S. economy is still growing.
David Kotok, chief investment officer at Cumberland Advisors, said that “zero and then negative interest rates have created a monstrosity in Europe,” and warned Trump’s demand “to follow Europe into this quagmire would harm every saver, every insurance company, every bank” in the U.S.
“Trumpanomics of Fed bashing and trade war are an economic menace to the United States,” he added.
Trump continued his rant in another post, writing online: “The USA should always be paying the the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”
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