Trump Ups Pressure on Fed, Seeking Rates of Zero ‘Or Less’

Donald Trump is tweeting that the Fed should cut interest rates to 'zero or less' to refinance debt

Donald Trump is tweeting that the Fed should cut interest rates to 'zero or less' to refinance debt

The Fed should "get our interest rates down to ZERO, or less", Trump said in an early Wednesday tweet that went beyond his previous attacks and demand for a cut of one percentage point.

PRESIDENT Donald Trump wants United States "interest rates down to ZERO, or less", he tweeted on Wednesday amid widespread expectations that the Federal Reserve will cut rates later this month. While it's true that the government could sell bonds at lower interest rates than those on much of its outstanding debt, it would have to pay a big premium to buy back and retire some old bonds, effectively negating the financial benefits.

Powell has indicated the possibility of more cuts to prevent the economy from slowing down, but has stressed that the Fed does not consider political factors in deciding on monetary policy.

"It is only the naivete of Jay Powell and the Federal Reserve that doesn't allow us to do what other countries are already doing".

Trump has often bragged about his use of debt as a real estate investor. If the economy is as great as we've all been led to believe, then why the need for historically low rates, Moody's Analytics Chief Economist Mark Zandi asked.

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The New York Times gives the larger global economic context: "The European Central Bank is expected to cut a key interest rate to a record-low negative 0.5 percent and roll out additional stimulus measures at its meeting on Thursday, in a bid to shore up very-low inflation and waning growth in important economies like Germany".

A recent study published by the University of Bath found negative rates decreased lending.

The US president called the Fed's rate-setters "boneheads" in another online barrage targeting its policymakers, warning they are missing out on "a once-in-a-lifetime opportunity".

Fed officials have suggested the idea of setting their target policy rate below zero as not worth the risks. The policy is meant to account for extremely weak economic conditions by essentially charging banks to hold reserve deposits at the Fed.

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