Trump tweets Fed 'boneheads' should cut rates 'down to zero or less'

Trump tweets Fed 'boneheads' should cut rates 'down to zero or less'

Trump tweets Fed 'boneheads' should cut rates 'down to zero or less'

The central bank has increasingly become a target of verbal assaults out of the White House ahead of the 2020 elections.

If the Fed cuts rates dramatically when the economy is still sturdy, consumers and businesses likely would view the move as a sign of trouble, prompting many to pull back spending and possibly leading to the growth slowdown they fear. There are also questions over whether the Federal Reserve Act even allows it to deploy negative rates.

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President Donald Trump Wednesday slammed Federal Reserve Chairman Jay Powell and the agency's members as "boneheads" while calling for interest rates of "zero, or less".

The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. "INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term", he added. "We have the great currency, power, and balance sheet", Trump tweeted out. "A once in a lifetime opportunity that we are missing because of "Boneheads" ". The Fed's benchmark rate is now 2%-2.25% following a quarter-point reduction on July 31 - the first cut since the Fed lowered rates effectively to zero in 2008, during the worst financial crisis and economic downturn since the Great Depression. Policymakers are unlikely to cut to the extent the White House wants, since interest rates are already low by historical standards.

Trump's post follows release of Washington Post - ABC News poll yesterday that showed majority of Americans fear US will enter a recession within next year.

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