Trump urges Fed 'boneheads' to cut interest rates to negative

US President Donald Trump was active on social media overnight and, in a series of tweets, urged the “boneheads” at the Federal Reserve to slash interest rates into negative territory.

However, global markets ended their overnight session sharply higher as investors shrugged off his latest outburst.

Mr Trump then tweeted he would delay raising tariffs on $US250 billion worth of Chinese imports by two weeks.

His decision was in response to China’s announcement it would exempt 16 US products from being punished with import taxes.

Beijing’s exemptions and Washington’s delay came days ahead of mid-level negotiations aimed at defusing a trade war between the world’s two largest economies.

Cut rates ‘way down’

It represents a backflip for Mr Trump as he previously told reporters at the White House, last month, that he did not want to see negative rates in the United States.

External Link: Trump tweet

“The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt,” Mr Trump posted on Twitter.

“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 … lowest rate. No Inflation!

“It is only the naivete of [Fed Chairman] 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’.”

Negative rates are usually a last resort, used reluctantly by central banks to battle weak economic growth — but would punish savers who are relying on interest from their bank deposits.

Market snapshot at 7:45am (AEST):ASX SPI futures +0.4pc at 6,663, ASX 200 (Wednesday’s close) +0.4pc at 6,638AUD:

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