Trump doubles down on his rebuke of the Fed, says tightening 'hurts all that we have done'
- President Donald Trump on Friday tweeted that monetary-policy tightening "hurts all that we have done," suggesting that higher borrowing costs could undermine the economy's gains.
- His comments came a day after he said he was "not thrilled" that the Federal Reserve was raising interest rates.
- His remarks break with longstanding tradition of US presidents not commenting on central-bank policy to preserve the institution's independence.
- Trump also accused the European Union, China, and "others" of manipulating their currencies lower and creating an uneven playing field with the US.
President Donald Trump on Friday said monetary policy tightening "hurts all that we have done," suggesting that higher borrowing costs could undermine the economy's gains.
His tweet came a day after he told CNBC that he was "not thrilled" the Federal Reserve was raising borrowing costs as the economy improved.
Trump also tweeted that the European Union and China were manipulating their currencies lower, creating an uneven playing field with the US.
"China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge," Trump tweeted." As usual, not a level playing field..."
He continued: "The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?"
Unlike most other currencies that float freely, China's central bank intervenes to keep the currency in a trading range.
The Chinese yuan hit its lowest level in over a year on Friday, as its central bank indicated it was willing to tolerate a weaker currency. A weaker currency would make it cheaper for the country to sell its products to buyers with US dollars, which would be handy as both nations impose tariffs on each other's goods.
The US dollar index, which measures the greenback against a basket of other developed-nation currencies, fell after Trump tweeted, by as much as 0.6% to 94.59.