President Trump on Tuesday slammed the Federal Reserve for not cutting interest rates in response to the coronavirus outbreak across the globe, pointing to other countries’ efforts to increase the money supply as a way to soften the blow the virus has had on the global economy.
“Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so,” the president wrote in a pair of early morning tweets.
“Our Federal Reserve has us paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big,” Trump said, adding that Federal Reserve Chairman Jerome Powell “has called it wrong from day one. Sad!”
A day earlier, Trump criticized the Fed for “as usual” being “slow to act” as the virus continues to cause economic harm.
“The U.S. should have, for all of the right reasons, the lowest Rate. We don’t, putting us at a competitive disadvantage. We should be leading, not following!” Trump wrote.
In July, the Fed slashed interest rates for the first time since the 2008 economic crisis, a long-expected move aimed at preserving the record economic expansion in the U.S. amid concerns that it may be nearing its end.
Since then, officials have been reticent about whether they will cut interest rates again. Powell told Congress last month that he does not currently plan to lower rates in the near future.
Powell admitted, however, that the coronavirus epidemic could lead to “disruptions in China that spill over to the rest of the global economy,” and said it was “very likely” the outbreak would disrupt economic activity in the United States.
Powell said in a statement that the Fed is “closely monitoring developments and their implications for the economic outlook” and will “use our tools and act as appropriate to support the economy.”
The coronavirus has killed infected more than 3,000 people worldwide, including six people in the U.S., and infected over 90,000. The stock market tanked last week along with markets worldwide as fears of the spreading epidemic rattled investors.