Published: Fri, August 09, 2019
Finance | By Loren Pratt

Trump Says US Economy 'handcuffed' by Fed, Wants Further Rate Cut

Trump Says US Economy 'handcuffed' by Fed, Wants Further Rate Cut

They must cut rates bigger and faster and stop their ridiculous quantitative tightening now.

The Philippine central bank cut its benchmark interest rate by 25 basis points on Thursday.

In an effort to offset the cost of tariffs, China devalued its currency on August 5.

According to the latest Reuters poll, US economic growth was forecast to slow to an annualised rate of 1.8% by end-2020 from the 2.1% reported for last quarter and well below the 3.1% rate in the first.

Hardline White House trade advisor Peter Navarro on Tuesday said the Fed should cut as much as a full percentage point from the key interest rate to reverse the increases made previous year as the economy was in a strong recovery.

Donald Trump lashed out at the USA central bank on Wednesday, accusing the Federal Reserve's interest rate policy with holding back the economy from winning a trade war he is trying to wage with China.

President Trump "knows the result he wants, which is lower interest rates", Reinhart told Yahoo Finance's "The First Trade".

Moore noted that the Chinese economy would suffer significantly because of trade tensions, however, "they might take the American economy down with them". "Our problem is a Federal Reserve that is too. proud to admit their mistake of acting too fast and tightening too much (and that I was right!)". However, U.S. stocks fell after Fed Chairman Jerome Powell erased hopes of future rate cuts.

Trade, as Powell pointed out last week, is an "unusual" factor for central bankers to consider when weighing future policy moves to keep the economy on an even keel.

Besides the tit-for-tat battle between Washington and Beijing, another important risk facing the USA stock market is the Federal Reserve, according to Moore.

President Trump's patience is wearing even thinner when it comes to the Federal Reserve.

Many market analysts expect the Fed to cut interest rates again in September and possibly two other times before the end of the year.

"It is not reasonable for monetary policy to respond to all these threats and counter-threats".

Earlier Germany reported industrial production had fallen much more than expected in June, with declines across the board in capital, consumer and producer goods, heightening fears of a recession in Europe's largest economy and sending government bond yields to record lows.

"I think the market reaction is to be expected. We will WIN anyway", he said.

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