President Donald Trump continued to keep up pressure on the Federal Reserve (Fed), criticizing the central bank for letting U.S. exporters struggle in a climate of high interest rates and a strong dollar.
“The Federal Reserve loves watching our manufacturers struggle with their exports to the benefit of other parts of the world,” President Trump said in a tweet on Tuesday, Aug. 27.
Complaining that almost all other countries are taking advantage of the good old USA, the president said, “Fed has been calling it wrong for too long!”
The Federal Reserve loves watching our manufacturers struggle with their exports to the benefit of other parts of the world. Has anyone looked at what almost all other countries are doing to take advantage of the good old USA? Our Fed has been calling it wrong for too long!
— Donald J. Trump (@realDonaldTrump) August 27, 2019
President Trump began a new attack on the Fed after saying earlier this month that the U.S.’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for manufacturers like Caterpillar, Boeing, John Deere, car companies, and others to compete on a level playing field.
With great businesses the United States has, the president said that if Fed made substantial rate cuts and without quantitative tightening, the dollar would make it possible for those companies to win against any competition.
Last week, President Trump complained that U.S. businesses are “paying much more in interest than Germany and certain other countries,” but “as usual, the Fed did nothing.”
During eight years of the Obama administration, the Fed kept interest rates at near zero. But in just two years under President Trump, the central bank raised interest rates seven times and just cut the rate by only 25 basis points to a range of 2.0-2.25 percent on July 31.
That move is not enough to satisfy President Trump who wants more aggressive actions from the Fed and its chairman Jerome Powell.
Over the past week, President Trump wrote tens of tweets targeting “a very weak Fed.”
On Aug. 21, the president said, “We are competing with many countries that have a far lower interest rate, and we should be lower than them. Yesterday, ‘highest Dollar in U.S. History.’ No inflation. Wake up Federal Reserve. Such growth potential, almost like never before!”
On Aug. 22, he wrote, “Germany sells 30 year bonds offering negative yields. Germany competes with the USA. Our Federal Reserve does not allow us to do what we must do. They put us at a disadvantage against our competition. Strong Dollar, No Inflation! They move like quicksand. Fight or go home!”
On Aug. 23, President Trump said, “We have a very strong dollar and a very weak Fed.” Then he raised a question, “Who is our bigger enemy, Jay Powell or Chairman Xi [Jingping]?”
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
A strong dollar would make American products less competitive in world markets, especially when China has been lowering its currency to make its exports cheaper.
China allowed the yuan to weaken to an 11-year low early this week after President Trump announced new punitive tariff on almost all Chinese goods last Friday, Aug. 23. A weaker yuan, which has dropped nearly 4 percent so far in August, could give China a trade advantage against the United States.
Also on Aug. 23, President Trump said, “Vast amounts of money made and stolen by China from the United States, year after year, for decades.” He then said he ordered U.S. companies to start looking for an alternative to China to do business as well as move operations back to the United States.