US President Donald Trump spent much of the early day on Tuesday complaining that the Federal Reserve has no idea how to do their jobs, mostly through a series of tweets staunchly defending his implementation of tariffs and alleging that multiple currencies have recently dropped in value compared with the US dollar.
Of course, this is just the latest in a long string of oft-Twitter-based criticisms over the central bank’s decision to raise interest rates. Tuesday’s lambasting marks the second consecutive day, this week, with the sharing of a Bloomberg op-ed piece pointing at the low cost of travel to Europe has resulted in a tourism boom in the region.
Trump’s argument, then, is that the Euro has lost so much value (compared with the skyrocketing value of the dollar) and that puts the US “at a big disadvantage.” He goes on to somewhat-incoherently reprimand, “The Fed interest rates way too high, added to ridiculous quantitative tightening! They don’t have a clue!”
Now, The Federal Reserve has been raising interest rates since 2015. Nine times since then, do be exact, and then another seven times since the current Commander-In-Chief took to the oval office (which was in 2017). This, the Fed says, was necessary to prevent uncontrollable inflation; but Trump has repeatedly requested Fed should cut rates through the rest of this year.
But in December, when the Fed issued the final interest rate increase of 2018, Trump laid waste to the central bank. In fact, at the time he tweeted “[the Fed is} the only problem our economy has,” noting that officials “don’t have a feel for the Market.”
And then on Monday Trump complained that the Fed made a mistake by raising interest rates “far too fast.” Furthermore, Trump went on to admonish that China keeps devaluing their currency.
At the same time, market expectations for rate cuts have become more insistent thanks to the recent release of weaker economic data. For example, the United States Department of Labor’s jobs report, for May, indicates that employment grow by only about 75,000. That is far below what analysts had originally estimated. In the meantime, manufacturing activity slowed, also in May, to its slowest pace since October of 2016.