Donald Trump again sent fierce criticism on Wednesday to the US Central Bank (
Fed), denouncing the "naivety" of his boss, Jerome Powell. "The Federal Reserve should reduce our interest rates to ZERO, or below, and then we should start refinancing our debt," thundered the president of the
United States in a morning tweet.
He went on to treat Fed officials as "idiots" who ignore a "unique opportunity" to align with the near-zero rates of other industrialized countries. The US president regularly attacks the Fed and Jerome Powell, whom he himself appointed to head the Federal Reserve a year and a half ago, demanding a significant rate cut.
The question of debt
The day-to-day interest rates of the Central Bank, which affect all other loans, range from 2% to 2.25%. They were down a quarter of a percentage point (0.25%) at the end of July to keep pace with the slowdown in the economy. They had been increased four times last year as a result of sustained economic growth and a full-fledged labor market. The latest increase, decided in December, was controversial and provoked the ire of the host of the White House who was already calling for a rate hike.
Markets expect the Fed to lower them again at its next monetary meeting on 18 September, but probably another quarter of a percentage point, far from the scale demanded by the president. According to Donald Trump, lower rates would notably cause the dollar to fall, which would make US exports more competitive in the context of a trade war with Beijing.
Donald Trump also mentions the repayment of debt while it has become abysmal, dug in particular by tax cuts that have reduced revenues and increases in spending, including military. The budget deficit will rise to nearly $ 1 trillion for the 2019 financial year ending at the end of September. The country's debt has exceeded $ 22 trillion, almost equivalent to the annual Gross Domestic Product (GDP) of the world's largest economy.