President Trump continued his long-running critique of the Federal Reserve Wednesday in a series of tweets blasting his own hand-picked chair, Jerome Powell, and the rest of the "Boneheads" there who, he said, need to be slashing interest rates below zero—a far cry from the comparatively moderate rate cuts he's previously called for. Just last month, the president told reporters he doesn't want negative rates in the US, Reuters reports. His two tweets in full:
- "The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet..... ....The USA should always be paying the the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of 'Boneheads.'"
Per the New York Times, the comments came a day before European policymakers are expected to further cut a key interest rate to a record low of negative 0.5%; the paper calls the tactic a "last-ditch monetary policy tactic tested abroad but never in America." The Fed declined to make such a move even during the Great Recession, and now, with the economy growing, consumer spending strong, and unemployment low, an expert tells Reuters cutting rates below zero could "create the next financial crisis—people taking on more risk than they would otherwise because money is even cheaper." As for Trump's assertion that the US should pay the lowest rates, the Times notes countries with stronger economies typically pay higher rates. And as for his suggestion of the US refinancing its debt, NBC News notes there's no modern precedent for such a move. (More Federal Reserve stories.)