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Trump escalates war of words with central bank boss | Business News

By August 21, 2019 No Comments
WASHINGTON, DC - NOVEMBER 02: (L to R) U.S. President Donald Trump looks on as his nominee for the chairman of the Federal Reserve Jerome Powell takes to the podium during a press event in the Rose Garden at the White House, November 2, 2017 in Washington, DC. Current Federal Reserve chair Janet Yellen's term expires in February. (Photo by Drew Angerer/Getty Images)

Donald Trump has stepped up his attacks on Federal Reserve chairman Jerome Powell, comparing him to a bad golfer and blaming the US central bank for slow economic growth.

On Twitter, the US president accused Mr Powell of “letting us down”, describing him as “a golfer who can’t putt, has no touch”.

“Doing great with China and other Trade Deals. The only problem we have is Jay Powell and the Fed,” Mr Trump added.

In July, the central bank cut interest rates for the first time in a decade. Minutes from that Federal Open Market Committee (FOMC) meeting were released on Wednesday evening.

The notes revealed a split among central bank officials, with some calling for more strident easing, and others pushing to keep rates steady.

The issue of interest rates has dogged the relationship between the president and the central bank chair since Mr Powell assumed the role of chair.

Mr Trump has reportedly been frustrated with the Federal Reserve’s decision to gradually raise interest rates from historic lows following the 2008 financial crisis.

In an interview with ABC in June, Mr Trump said that GDP growth would have been “at least a point and a half higher” under a different chair who wasn’t set on raising rates.

The president has repeatedly criticised Mr Powell, describing him earlier this month as “clueless”, while blaming the central bank’s policies for warning signs of a looming recession.

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Mr Powell was picked by the president to head the Federal Reserve in November 2017

He reportedly explored the option of firing Mr Powell in June, but backed down after being warned by his advisers that the move could potentially be catastrophic for investor confidence, according to Bloomberg News.

Mr Trump himself picked Mr Powell to succeed outgoing chair Janet Yellen in November 2017.

Despite being nominated by the president, the Federal Reserve is supposed to be shielded from political intervention, allowing it to make independent, long-term decisions.

Markets were rebounding on Wednesday, with S&P 500 climbing by over 21% ahead of the release of the FOMC minutes.

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