Abu Dhabi, UAESunday 6 December 2020

Donald Trump blames Federal Reserve for market plunge

The US president named Jay Powell for the poor market performance

US Federal Reserve Chairman Jerome Powell. The Fed was criticised for being "slow-moving" by US president Donald Trump on Wednesday as he reiterated his call for lower interest rates to bring the US in line with other, major developed economies. The Fed declared an emergency rate cut of 50 basis points last month and is scheduled to meet again next week. AFP
US Federal Reserve Chairman Jerome Powell. The Fed was criticised for being "slow-moving" by US president Donald Trump on Wednesday as he reiterated his call for lower interest rates to bring the US in line with other, major developed economies. The Fed declared an emergency rate cut of 50 basis points last month and is scheduled to meet again next week. AFP

US president Donald Trump slammed the US Federal Reserve on Tuesday, calling the institution "pathetic" and "slow moving", saying it should bring US interest rates down to the level of competitor nations as he called for more aggressive cuts.

The US Federal Reserve announced a 50 basis point emergency rate cut last week in response to growing fears over the state of a global economy disrupted by the coronavirus, with the lower-bound rate now standing at just 1 per cent.

Despite this, markets still witnessed their biggest sell-off since the 2008 financial crisis on Monday, spurred by coronavirus fears and a crashing oil price as the Opec+ alliance dissolved.

"Our pathetic, slow moving Federal Reserve, headed by Jay Powell, who raised rates too fast and lowered too late, should get our Fed Rate down to the levels of our competitor nations," Mr Trump tweeted, reiterating his demand that the central bank lower its key lending rate to stimulate the economy.

"The Federal Reserve must be a leader, not a very late follower, which it has been!"

Stocks rebounded on Tuesday with Mr Trump saying he would announce “substantial” economic measures to combat the fallout from the coronavirus.

Mr Trump’s economic plan — which he said could include a payroll tax cut and paid sick leave — does not yet have buy-in from Congress, though he is dispatching top aides to start pitching the measures on Capitol Hill. The president said he would unveil a plan within 24 hours.

The Federal Reserve's Open Market Committee is set to hold its next two-day meeting to discuss rates next week.

Updated: March 10, 2020 07:02 PM

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