ZCZC
BCN-15
US-ECONOMY-BANK-RATE
Trump says he wants ‘a large cut’ from US Fed
WASHINGTON, July 30, 2019 (BSS/AFP) – US President Donald Trump on Tuesday
called on the Federal Reserve to cut the benchmark interest rate
significantly, moments before the central bank was due to open its two-day
policy meeting.
“I would like to see a large cut,” Trump told reporters at the White House,
his latest move in a constant campaign to pressure monetary policymakers.
“I’m very disappointed in the Fed,” he said.
Markets overwhelmingly expect the central bank on Wednesday will cut in the
key lending rate by 25 basis points — the first cut in more than a decade —
amid a slowing global economy impacted by trade uncertainty and sluggish
business investment.
That would undo the Fed’s most recent increase in December, which was the
last of four in 2018 and the US economy picked up steam.
But Trump seems to be calling for a deeper cut of 50 basis points or
perhaps more. But a cut of that size is typically used only when the economy
is experiencing a steep slowdown.
The current economic expansion is now entering its 11th year, making it the
longest on record. And with steady job growth, low unemployment and asset
prices running high, economists are split as to whether the world’s largest
economy needs stimulus.
But the Commerce Department on Tuesday also reported that inflation
remained tame last month, confirming that there is slim likelihood of a
breakout in price pressures.
Other economists say rate increase in December was a mistake.
Fed Chairman Jerome Powell, the target of Trump’s ceaseless barbs, has
signaled the bank is likely to lower rates due to economic uncertainties,
including Trump’s protracted trade wars with China and Europe which has
caused business investment to fall sharply.
BSS/AFP/SR/2021 HRS