Trump says Fed is his 'biggest threat,' lambastes Chairman Powell for raising rates

"I'm not blaming anybody. I put him there," the president said about selecting Jerome Powell as head of the Federal Reserve.
Image: Treasury Secretary Steven Mnuchin Speaks At Meeting Of The Financial Stability Oversight Council
Federal Reserve Chairman Jerome Powell at a meeting Tuesday at the Treasury Department.Alex Wong / Getty Images

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By Lucy Bayly

President Donald Trump doubled down on his criticism of the Federal Reserve on Tuesday, lambasting the independent agency and expressing frustration with Fed Chairman Jerome Powell.

"My biggest threat is the Fed," Trump said in an interview with Fox Business. "The Fed is raising rates too fast. You look at the last inflation numbers, they're very low."

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"I'm not happy with what he's doing because it's going too fast," Trump said of Powell. "You look at the last inflation numbers, they're very low."

However, the president acknowledged: "You know what, can I be honest? I'm not blaming anybody, I put him there. And maybe it's right, maybe it's wrong. But I put him there."

He also noted that there are a "couple of other people there I'm not so happy with, too. But for the most part I am very happy with people."

Trump's comments are the latest in his beef with the nation's central bank. Last week when the stock market tanked by 800 points in one day, Trump directly blamed the Fed, telling reporters: "The Fed is going wild. I mean, I don't know what their problem is that they are raising interest rates and it's ridiculous."

It’s rare for a sitting president to comment on the Fed, which is supposed to remain immune to political pressure. Trump clarified that he had no intention of firing Powell. Although there is no historical precedent for such action, according to Section 10 of the Federal Reserve Act it is technically possible, since "each member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President."

In his first eight months as Fed chairman, Powell has raised the benchmark interest rate three times by a quarter of a point and has projected at least one more hike before the end of the year. His predecessor, Janet Yellen, who held the position for four years, kept the rate artificially low to allow the economy to grow after the 2008 recession.