Trump Blasts Fed: "Not Thrilled" About Rising Rates, Says Strong Dollar "Disadvantageous"

Update: and as has been the case recently, the White House had to immediately clarify what Trump meant:

  • WHITE HOUSE SAYS TRUMP `RESPECTS THE INDEPENDENCE' OF FED
  • WHITE HOUSE SAYS TRUMP ISN'T INTERFERFERING WITH FED DECISIONS

In response, the USD staged a feeble bounce which is already being faded.

* * *

It should perhaps come as no surprise that the president who once called himself a "low interest rate guy", has finally laid into the Fed, and during an interview with CNBC's Joe Kernan, criticized the US central bank saying that he is "not thrilled" about rising rates, and would prefer a weaker dollar to offset the Chinese Yuan which is "dropping like a rock."

“I’m not thrilled,” he told Joe Kernen.

“Because we go up and every time you go up they want to raise rates again.

I don't really...

I am not happy about it. But at the same time I’m letting them do what they feel is best.”

"But I don’t like all of this work that goes into doing what we’re doing.”

Trump also said he’s concerned that the timing of the Fed's rate hikes may be poor and the resulting strong dollar will put the U.S. at a “disadvantage” while the Fed’s counterparts like the European Central Bank and the Bank of Japan maintain loose monetary policy.

The statements, which could have comes from Turkey's Erdogan on any given day, and which will immediately be seen as threatening the Fed's independence, is sure to spark another meltdown, this time in the business media.

The president acknowledged that his comments are unusual but said he doesn’t care.

“Now I’m just saying the same thing that I would have said as a private citizen,” he said.

“So somebody would say, ‘Oh, maybe you shouldn’t say that as president. I couldn’t care less what they say, because my views haven’t changed.”

“I don’t like all of this work that we’re putting into the economy and then I see rates going up,” he said.

Finally, hinting that trade war is about to become a full-blown currency war, Trump confirmed that he is well aware of what is going on China where the Yuan has been crashing relentlessly for the past month, and said that the Chinese currency is "dropping like a rock"... which it is:

Full interview below:

The result: the dollar predictably tumbled:

Gold spiked:

And stocks hiccuped...

And while Trump's unorthodox comments are sure to set off a firestorm of criticism and complaints that Trump is seeking to eliminate the Fed's independence, which of course it isn't, because as Ben Bernanke's former advisor once admitted, "A lot of people would be stunned to know the extent to which the Federal Reserve is privately owned", here is an excerpt from the NYT, showing how previously US presidents handled Fed "independence":

However, since it is all about preserving the "narrative", the blowback was immeidate with Former Dallas Fed President Richard Fisher telling CNBC that Trump is out of line.

“One of the hallmarks of our great American economy is preserving the independence of the Federal Reserve. No president should interfere with the workings of the Fed,” Fisher said. “Were I Chairman Powell, I would ignore the President and do my job and I am confident he will do just that.”

Comments

Jayda1850 Thu, 07/19/2018 - 13:18 Permalink

Hahahaha. How long before he comes out and calls for more QE and Trump fanboys on here swoon in approval negating every argument that this site has stood for since its inception?

DingleBarryObummer tmosley Thu, 07/19/2018 - 13:24 Permalink

...but TMolochio said he supported raising rates so people could save more...

The truth is Kushner's Father-In-Law gives no shits about the long term prosperity of America.  He outsourced production of his clothing line to China, and he will do it again after he's not president anymore. This is just a temporary gig for him to benefit his empire and financial legacy.  Just another typical politician, folks, preying on desperation and fear.

It's just a game

Trump: The Board Game - Wikipedia

The banks are going to need another bailout, and Kushner's Father-in-Law will capitulate, or they will foreclose on his creaky empire.

In reply to by tmosley

curbjob El Oregonian Thu, 07/19/2018 - 13:31 Permalink

"And like the real Titanic 116 years later, there are STILL not enough lifeboats to go around."

As always, there are exactly enough life  boats to go around; provided you have club membership.

Aside and to the point; if the Fed raised interest rates to 10% ( historically not particularly high) I'd be wealthier than Trump.

In reply to by El Oregonian

Uchtdorf El Oregonian Thu, 07/19/2018 - 14:21 Permalink

"Donald Trump the presidential candidate denounced the Federal Reserve’s promotion of low interest rates as feeding a risky economic bubble. Now in the White House, regularly celebrating the stock market’s advances, he’s had a change of heart.

“I do like a low-interest-rate policy, I must be honest with you,” Trump told the Wall Street Journal in April, less than three months after taking office." https://www.bloomberg.com/news/articles/2017-11-02/trump-hated-low-inte…'

One of the sure ways you can tell someone (especially Trump who overuses the expression) is lying to you is if they say' "Let me be honest with you," as if you had been preventing them from being honest all along.

In reply to by El Oregonian

philipat Uchtdorf Thu, 07/19/2018 - 20:28 Permalink

I'm only surprised that it took Trump so long to come out against the Fed. The Fed has a different agenda (together with the cabal) which involves pulling the plug on the stock market when the time is right and Trump has taken ownership of the stock market. So he needs to be able to say "I told you so" when it does crash; hence his comments. One piece of logic missing in this debate is that printing green paper to finance a ballooning federal deficit is inflationary which requires higher rates; and Trump IS in control of that. But I blame the Fed also for that because by keeping rates too low for too long they have allowed the politicians to continue spending money we don't have. It also needs to be seen in the context that by any normal measure, rates remain historically very low. And if, as the MSM and financial comedy channels keep telling us, the economy is all unicorns and rainbows, how come rates are still at essentially emergency levels 10 years after the 2008 meltdown? 

In summary, Trump is right for the wrong reasons and the Fed is wrong for the right reasons!!

In reply to by Uchtdorf

james diamond squid El Oregonian Thu, 07/19/2018 - 14:27 Permalink

trump passes a huge tax cut that primarily benefits corporations (lower tax rates) and landlords (first 20% of rental income is no longer taxed).  this tax cut blew apart any "hope" of achieving any control over the deficit.  now that short rates are going up, the interest cost to service the debt is growing rapidly.  there have been no cuts to the budget, thus the deficit is on auto pilot to infinity.

so now trump wants short rates back at 0.  that would hurt the long end, but not crush it because the western world is teetering on catastrophy,  but the long end at 4-5% will kill housing, the place consumers get their "extra" money (they dont get it from wages).  what trump wants is the stock market/housing elevated, because people vote from their wallet size.  trump desires instant gratification, not long term stability.  he's a fucking economic moron with the rest of them.  keep the ponzi going for as long as possible and get approval ratings up.

austerity and a balanced budget are no longer achievable.  a total reset is possible, but a japan style decay is more likely  (eating inflation forever with low asset prices and 0% interest).

ron paul is the only public figure that sees the problem.  trump doesn't see it (or is in denial) and no R or D sees it.

if you can't even see the problem (or are in staunch denial) then you can never find the solution.  each kick of the can raises the likelihood of a total reset and collapse.  japan (part deux) is the most hopeful outcome for those fearing the reset.

let the down votes come.  trump is either an economic idiot or more likely is on board with kicking the can and short term gratification. the stoopid (or genius) fuck points at the stock market almost every day and says "look what i did".  

In reply to by El Oregonian

the crow james diamond squid Thu, 07/19/2018 - 20:39 Permalink

Omg...your my hero...its about time someone explained it so perfectly to the trumptards....oh by the way rand paul has a good handle on it as well....(he was the only politician to actually read the budget). If i were an american he would get my full support....not that it would make any difference at this point....the titanic has already hit the iceberg...the band is just playin a new tune right now.

In reply to by james diamond squid

CJgipper El Oregonian Thu, 07/19/2018 - 14:54 Permalink

Just to sum up the current situation:

 

1.  The fed printed enough money to bail out the banks who made horrible loans and zeroed out rates to ensure that housing prices didn't reset to incomes.

 

2.  The fed LEFT rates at zero for a decade destroying any semblence of savings while Obozo did everything he could to destroy the United States economy and government budget.

 

3.  Trump rolls back taxes, regulations, trade deals, etc. in order to get the US economy going again.

 

4.  The fed IMMEDIATELY quadruples rates just as the economy shows the slightest hint of life.

 

5.  It's all Trump's fault.

 

In reply to by El Oregonian

Balance-Sheet james diamond squid Thu, 07/19/2018 - 18:26 Permalink

There will likely never be a balanced budget in the US in the lifetime of any reader here on ZH. The accounting system could be changed to remove the currency creation process more from the public eye as people do not understand what the national debt is nor do they wish to understand but even with the change the process will be the same. Increasing percentages of total lending will be done by government as opposed to what was considered normal decades, many decades ago.

In reply to by james diamond squid

two hoots curbjob Thu, 07/19/2018 - 13:43 Permalink

Trade (near and far), tax cuts, interest rates, dollar value, Trump is, at least, more involved and likely experienced in our overall economic future than any ex-living presidents +.  Add to this his knee deep involvement in immigration, NATO, Russia, ME issues and others one must suspect he is mentally versatile and surely not there for his own comfort.  doing too much on his own likely because all advise he gets is politically tainted/poisoned.  It's gonna be a rough voyage, start to finish.  At some point Trump must take the axe to government spending, course SS/Medicare/caid will soon make that dream obsolete.  All want change as long as it does not effect them so we just ride this horse 'til it falls over.

In reply to by curbjob

tmosley DingleBarryObummer Thu, 07/19/2018 - 13:53 Permalink

You think it is in our best interests for China to collapse?

You think 300+ loose nukes are in our best interests?

You think 750 million impoverished Chinese refugees flooding the world is in our best interests?

No, you don't think at all. You make an ill informed decision about what side you want to be on then you howl it from the rooftops.

In reply to by DingleBarryObummer

DingleBarryObummer tmosley Thu, 07/19/2018 - 13:59 Permalink

So the solution is just keep rates low forever.. kick the can some more?  Kushner's Father-In-Law just has to kick the can for a couple more years then he can retreat/retire to a luxury bunker somewhere.  The rest of us are not in such a good position.

This is a stupid argument anyway.  They will never be able to catch up with inflation without bursting the bubble and causing a massive deflationary crisis.  And if they keep printing and buying bonds they will cause a currency crisis.  But let's blame everything on kneeling footballers and Maxine Waters.

Centrally Managed communistic economies don't work, they fail.

In reply to by tmosley

rejected tmosley Thu, 07/19/2018 - 16:35 Permalink

"We just ease off a little bit. Let them adjust, then push some more.

Christ you are one disingenuous mother fucker aren't you?"

 

So you actually believe this mess of an economy can be saved by just easing off 'a little' while the debt keeps piling up. Then you say we can adjust later,,, after the debt load is even higher!

Just who is being disingenuous here?

And what is it with name calling,,, Are you that petty?

In reply to by tmosley

z0na8an0z DingleBarryObummer Thu, 07/19/2018 - 14:18 Permalink

He's not saying keep the rates low forever.  The health of the economy has been a total charade over the last 10-years of mind-boggling QE. Trumps' trying to reverse course, to turn the ship around. Can we not acknowledge that now would be shitty-timing to overzealously correct the wrongs of our past 10 years, while also acknowledging that once better fundamentals are in place, then we must begin tightening the belt on the big-picture of our economy that's trillions in debt

In reply to by DingleBarryObummer

Juggernaut x2 sickofthepunx Thu, 07/19/2018 - 14:06 Permalink

The SPX skyrocketed because all of that money the Fed created out of thin air in the last 10 years and gave to the banks had to go somewhere- it sure as fuck didn't make it onto Main St. At the same time the price of houses, cars, Healthcare, college, food, etc blew past wages and decimated the middle class- well- at least what is left of the middle class. 

In reply to by sickofthepunx

lnardozi sickofthepunx Thu, 07/19/2018 - 14:59 Permalink

That's good, but I'm certain you'll admit it might just as easily have crashed 80%, like tech stocks did in 2000. There is always an element of risk in investing. PMs, on the other hand, are saving. Their purpose is to provide an untraceable source of money that cannot be sued away, garnished or confiscated with which to build a new life if something bad should happen to your old one. Prudence demands that each of us make some preparation for an untenable situation so we are not made destitute.

In reply to by sickofthepunx