President Donald Trump on Monday renewed his attacks on the Federal Reserve, calling the central bank the “only problem” in the economy.
“They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Border,” Trump said in a Twitter post Monday morning ET. “The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!”
The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!
— Donald J. Trump (@realDonaldTrump) December 24, 2018
The latest Twitter post riffs on a previous theme the president expressed prior to the Federal Open Market Committee’s meeting last week. Just hours before Fed officials convened last Tuesday, Trump said he hoped “the people over at the Fed” would “feel the market” before “they make yet another mistake,” or decide to raise rates again.
The Federal Reserve announced its decision to raise its benchmark interest rate for the fourth time in 2018 last week, upping the new band 25 basis points to between 2.25% to 2.5%.
Trump’s statements extend a months long attack on the central bank, with Jerome Powell – the Fed Chairman Trump himself had appointed – at the center of his ire. Equity markets have been stricken with volatility since the Federal Reserve’s third rate hike this year in September. Stocks tumbled yet again after last Wednesday’s rate hike decision, which was coupled with commentary signaling the central bank would be continuing its current process toward balance sheet normalization.
The excess market volatility may pose a concern for Trump in a 2020 presidential reelection bid. Public perception of a sitting president is often closely tied to the strength of the economy and stock market during a presidential term.
Trump has reportedly discussed firing Powell given his frustration in the Fed’s monetary policy path as of late, Bloomberg reported late last week. According to the report, unnamed people close to the president have warned him that such a move would be disastrous, and could undercut investor confidence in a central bank unswayed by political motivations. Powell has stressed in public statements that the central bank continues to function independently.
Treasury Secretary Steven Mnuchin attempted to extinguish concerns over Powell’s future in a series of Twitter posts over the weekend. Mnuchin said he spoke with Trump and quoted the president as having said, “I never suggested firing Chairman Jerome Jay Powell, nor do I believe I have the right to do so.”
Stocks continued to tumble as Trump made his latest comments. The S&P 500 is on track for its fourth consecutive session of declines and is inching toward a bear market, a threshold of 20% off its recent highs that the Nasdaq reached on Friday.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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