President Donald Trump attacked the Federal Reserve — again.
With just about a week left until the next Federal Open Market Committee’s policy-setting meeting, the president strongly urged that the central bank cut interest rates in a series of tweets Monday morning.
With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to compete. As good.....— Donald J. Trump (@realDonaldTrump) July 22, 2019
....as we have done, it could have been soooo much better. Interest rate costs should have been much lower, & GDP & our Country’s wealth accumulation much higher. Such a waste of time & money. Also, very unfair that other countries manipulate their currencies and pump money in!— Donald J. Trump (@realDonaldTrump) July 22, 2019
It is far more costly for the Federal Reserve to cut deeper if the economy actually does, in the future, turn down! Very inexpensive, in fact productive, to move now. The Fed raised & tightened far too much & too fast. In other words, they missed it (Big!). Don’t miss it again!— Donald J. Trump (@realDonaldTrump) July 22, 2019
The Monday morning tweets follow the president’s continuous string of attacks on both the Federal Reserve and Chairman Jerome Powell. FOMC participants are currently in a quiet period ahead of the July 30-31 meeting and will not be addressing the public until after the meeting is adjourned next week.
[Read more: Fed's jumbled messaging catches Trump's attention]
Headed into the meeting, the Fed fund futures contracts are predicting a 75.5% chance of a 25 basis point cut and a 24.5% chance of a 50 basis point cut. The current Federal funds rate is in a target range of 2.25% to 2.50%.
Furthermore, the U.S. Bureau of Economic Analysis will be releasing second-quarter GDP data on Friday. The GDP data will play a crucial role for the data-dependent Fed, as it determines whether or not to cut rates for the first time in a decade. Economists polled by Bloomberg are expecting the U.S. economy to have grown at a 1.8% rate, down from the 3.1% growth in the first quarter.
Even as the recent economic data proved better than expected, the Fed will likely still move ahead with a 25 basis point rate cut, according to Wells Fargo. The string of strong data over the past week and a half—higher than expected inflation, retail sales and manufacturing production—likely will not dissuade the Fed from cutting rates 25 bps at its July meeting,” the firm wrote in a note to clients July 19. “The market-implied certainty of a rate cut this month would seem to belie the observed health of the U.S. economy.”
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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