The White House has suggested that a 50-basis-point cut to interest rates would suffice. Therefore, the quarter-point reduction was never going to be enough.
President Donald Trump essentially admitted this in another series of tweets on Wednesday morning.
Trump demanded three more rate cuts by the Fed, arguing:
“Our problem is not China – We are stronger than ever, money is pouring into the U.S. while China is losing companies by the thousands to other countries, and their currency is under siege – 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!). They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW. Yield curve is at too wide a margin, and no inflation!”
He added that the United States would win in any event, but it would have been much better if the Eccles Building realized “we are competing against other countries, all of whom want to do well at our expense!”
The market widely anticipates that the Fed will cut interest rates by another 25 basis points in September, though Fed Chair Jerome Powell assured the press that this is not the beginning of long-term trend of rate cuts.
Powell referred to the Powell Pause as a “mid-cycle adjustment.”
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