President Donald Trump’s strikes on the Federal Reserve and its chairman, Jerome Powell, are an abuse of power and also represent a “big mistake” for the government, based on 2020 presidential frontrunner Joe Biden.
“I’m not going to get into the personalities, but I do say this: the president should not be trying to pressure the Fed,” Biden said in an interview with CNBC’s John Harwood. “That’s supposed to be an independent entity out here. It’s just like how he pressures the military and intervenes in the chain of command.”
“It’s his way of abusing power across the board. It’s a big mistake. A big mistake, and I would not do that,” the former vice president and Democratic hopeful added.
Powell has emphasized the importance of the Fed’s independence from political influence during his tenure, nearly always in reaction to the president’s criticisms.
Though other presidents have attempted to coerce the Fed to accommodative monetary policy in the past, prior criticism by presidents has been less private and less frequent. But Trump has for almost two decades made his displeasure with the Fed and its course of coverage well known in Washington and on Wall Street.
Federal Reserve Chairman Jerome Powell reacts during a press conference in Washington D.C., america, on July 31, 2019.
Liu Jie | Xinhua | Getty Images
The president lambasted what he believed several prohibitive interest rate hikes throughout 2018, telling The Washington Post last November that he is “not even a little bit happy” with his appointment of Powell to the top post in the Fed.
Asked from the Wall Street Journal in October 2018 if he regrets nominating Powell, he explained: It is “too early to tell, but maybe.”
However, the president has done little to abate his verbal attack, even as the Fed changed course in 2019 and eased borrowing costs at multiple points during the year.
Trump railed against Powell two weeks ago, claiming that “people are VERY disappointed in” that the Fed chairman regardless of the central bank’s third interest rate cut this year.
“China is not our problem, the Federal Reserve is!” Trump tweeted. “We will win anyway.”
Trump rather would rather the Fed gut interest rates down to zero or even into negative territory, a rare rate happening that many economists assert would bring more harm than good to the U.S. market.
Trump contends, however, that the present level of prices places the U.S. at a competitive disadvantage with other countries with which it trades, and cites historically low levels of inflation as evidence the central bank can manage to juice the economy with lower prices.