Washington: US President Donald Trump said he retained confidence in Federal Reserve Chair Kevin Warsh but accused other policymakers of raising interest rates to hurt him politically, offering no evidence for the allegation.
Speaking to reporters at Charlotte airport in North Carolina on September 16 (local time), Trump said borrowing costs were too high. He portrayed Warsh as constrained by colleagues whose votes he could not overcome.
“I do. I mean, I’m relying on Kevin, but he’s got a very tough board. He’s got a board that was put there by a lot of other people. And the interest rates are too high. They’re not appropriate.”
Trump was responding to a question about whether he still trusted Warsh after the day’s interest rate decision. He had arrived in North Carolina to campaign for Republican Michael Whatley.
The president said he had spoken to Warsh and suggested there was little point in opposing the other policymakers.
“I told Kevin, I said, you might as well vote with the board because it’s just not going to matter. The board is very hostile. They’re very political. They’re doing the wrong thing. They’re a bunch of politicians. They are people put on by politicians.”
Asked again about Warsh, Trump said the chair lacked the votes to prevail. His criticism focused on the other decision-makers, while he continued to express support for Warsh personally.
Trump also said he wanted the Fed chair to act independently. Asked whether Warsh had made the decision based on their conversation, he rejected that suggestion.
“No, I don’t think so. I think I want him to be independent, but my opinion, I’m very good at this stuff. Interest rates are too high.”
A reporter asked whether the rate increase was intended to bring down prices rising because of the war in Iran. Trump instead alleged a political motive.
“They’re raising the rates to make Trump do as bad as he can possibly do. The problem they have is that we have the greatest economy in history. We have over 21 trillion dollars being invested in this country, which is five times more than we’ve ever had before.”
He did not provide a breakdown or timeframe for the investment figure during the exchange. The supplied material does not include the Fed’s policy statement, the size of the rate change or a response to his allegations.
Trump argued that the United States should have the world’s lowest interest rates because of its credit strength. He said the economy was performing well despite borrowing costs that he considered excessive.
“We should be paying the lowest interest rate anywhere in the world because we have the strongest credit.”
He also claimed that changing trading arrangements could eliminate deficits and help repay debt. He did not set out a detailed proposal or explain how those changes would produce the savings he described.
US monetary policy decisions are made collectively through the Federal Open Market Committee. Its voting structure comprises the seven Federal Reserve governors, the New York Fed president and four other regional Reserve Bank presidents serving on rotation. The chair does not determine policy alone.
(IANS)
