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President Donald Trump and Federal Reserve Chair Jerome Powell.
- 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.