US President Donald Trump looks on as Jerome Powell, his nominee to become chairman of the US Federal Reserve, speaks at the White House in Washington November 2, 2017. — Reuters pic
WASHINGTON, April 15 — President Donald Trump said yesterday that actions by the US Federal Reserve have nicked US economic growth and stock market gains by perhaps 30 per cent, and that it should begin pumping money into the economy as it did during the 2007-2009 recession.
Trump’s latest broadside against the central bank, delivered by Twitter and without citing any evidence, came as European Central Bank head Mario Draghi and other international officials worried that a Fed politicised by potential Trump nominees would rattle a US dollar-based global system.
“If the Fed had done its job properly, which it has not, the Stock Market would have been up 5,000 to 10,000 additional points, and GDP would have been well over 4 per cent instead of 3 per cent…with almost no inflation,” Trump said.
“Quantitative tightening was a killer, should have done the exact opposite,” he said, referring to the Fed’s monthly withdrawal last year of up to US$50 billion (RM205.6 billion) of the bonds it acquired during the worst economic downturn since the 1930s Great Depression.
Trump’s suggestion the Fed return to quantitative easing would put the central bank in the position of adding monetary stimulus and expanding its presence in debt markets in an economy growing solidly and with historically low unemployment.
No one at the Fed, including three Trump appointees on the board of governors and Trump’s handpicked chairman, Jerome Powell, has suggested the US needs the sort of central bank help launched when the economy was in freefall a decade ago, according to minutes of recent Fed meetings.
The Fed has already decided to