Trump attacks Federal Reserve over ‘ridiculous’ rates

Washington, Aug 20 (IANS) US President Donald Trump has renewed his demand for lower interest rates, calling borrowing costs “ridiculous” and rejecting concerns that volatility in the bond market poses a threat to the American economy.

Trump argued that interest rates should fall when the United States reports strong economic numbers. Instead, he said, policymakers raise rates because they fear that faster growth will fuel inflation.

“Every time we do great, we announce great numbers, the interest rates go up,” Trump said at the White House. “And they go up because they want to stop inflation. They should go down because the country is strong.”

The President questioned why the United States pays higher interest rates than Switzerland and other countries that depend heavily on access to the American market.

“I see countries like Switzerland where they’re the number one lowest interest rates, a half a per cent, and we pay 3.5 per cent,” he said.

Trump argued that Washington could disrupt the economies of trading partners by cutting off business with them, making it unreasonable for those countries to borrow at lower rates than the United States.

“So, why are they prime if I can cut off the business and they are no longer functional, and yet they’re considered to be like an elite country?” he asked. “They live off the United States.”

Trump praised the Federal Reserve chairman but criticised the central bank’s board, describing it as political and suggesting that some members could be voting to raise rates for partisan reasons.

“We have a wonderful chairman, I think he’s doing a great job,” he said. “The problem is he has a board, and it’s a political board, people put in by Obama, Biden and me.”

“And so, they vote to raise interest rates,” Trump said. “I don’t know if they’re doing it because they think they’re doing a good thing or because they like the politics of it.”

Trump said lower borrowing costs would sharply reduce federal interest payments. He claimed that every percentage point added to interest rates costs the country $600 billion.

“We should pay the lowest interest rates,” he said. “Every point of interest is $600 billion. Think of that — every point of interest is $600 billion.”

Asked whether Americans should worry about volatility in the bond market, Trump dismissed the concern.

“No, I don’t think so because, like I said, our country is doing so well despite interest rates,” he said. “We have interest rates that are artificially — they’re actually artificially high. They raise them for no reason.”

The President claimed that trillions of dollars were entering the United States for investment in factories, plants and other projects, allowing the economy to overcome high borrowing costs.

“We’re the hottest country in the world; we are by far,” he said. “We have the hottest country in the world, and these people are helping us a lot.”

–IANS

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