Trump, despite solid U.S. growth, says Fed should fire up crisis-era stimulus
By Howard Schneider WASHINGTON (Reuters) - President Donald Trump said on Sunday that actions by the U.S. Federal Reserve have nicked U.S. economic growth and stock market gains by perhaps 30 percent, and that it should begin pumping money into the economy as it did during the 2007-2009 recession
By Howard Schneider
WASHINGTON (Reuters) - President Donald Trump said on Sunday that actions by the U.S. Federal Reserve have nicked U.S. economic growth and stock market gains by perhaps 30 percent, and that it should begin pumping money into the economy as it did during the 2007-2009 recession.
Trump's latest broadside against the central bank, delivered by Twitter and without citing any evidence, came as European Central Bank head Mario Draghi and other international officials worried that a Fed politicized by potential Trump nominees would rattle a dollar-based global system.
"If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4 percent instead of 3 percent...with almost no inflation," Trump said.
"Quantitative tightening was a killer, should have done the exact opposite," he said, referring to the Fed's monthly withdrawal last year of up to $50 billion of the bonds it acquired during the worst economic downturn since the 1930s Great Depression.
Trump's suggestion the Fed return to quantitative easing would put the central bank in the position of adding monetary stimulus and expanding its presence in debt markets in an economy growing solidly and with historically low unemployment.
No one at the Fed, including three Trump appointees on the board of governors and Trump's handpicked chairman, Jerome Powell, has suggested the U.S. needs the sort of central bank help launched when the economy was in freefall a decade ago, according to minutes of recent Fed meetings.
The Fed has already decided to halt the drawdown of its security holdings as of September after concluding that the size of its asset holdings, likely around $3.5 trillion by that point, would be adequate given the demand by commercial banks to hold central bank reserves, the public demand for cash, and the other uses to which its assets are put.
The Fed raised interest rates four times in 2018, but also has put that process on hold, leaving the target policy rate at a range of between 2.25 and 2.5 percent, still below historical averages.
Trump was angered last fall when a variety of economic risks, which analysts say included slowing growth abroad, Trump's own trade policies, and communications missteps by Powell, contributed to a more than 20 percent drop in the Dow Jones Industrial Average from October through December.
That loss has been almost completely erased as the Fed shifted gears, and the Dow is now just about 1.5 percent below the record it set on Oct. 3.
Trump remains peeved with Powell, and indicated he wants to name two political allies, economics commentator Stephen Moore and businessman Herman Cain, to fill two open seats on the Fed's board of governors.
(Reporting by Howard Schneider; Editing by Lisa Shumaker)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.