Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: donald trump | ron insana | fed | rate hike

CNBC's Ron Insana: Trump Wants Fed to Hike Rates for All the Wrong Reasons

CNBC's Ron Insana: Trump Wants Fed to Hike Rates for All the Wrong Reasons

(AP Images/Gerald Herbert)

By    |   Thursday, 08 September 2016 07:34 AM EDT


CNBC's Ron Insana says Republican presidential nominee Donald Trump wants the Federal Reserve to hike interest rates for all the wrong reasons.


Trump, who has previously accused the Federal Reserve of keeping interest rates low to help President Barack Obama, said on Monday that the U.S. central bank has created a "false economy" and that interest rates should change, Reuters reported.

"They're keeping the rates down so that everything else doesn't go down," Trump said in response to a reporter's request to address a potential rate hike by the Federal Reserve in September. "We have a very false economy," he said.

"At some point the rates are going to have to change," Trump, who was campaigning in Ohio on Monday, added. "The only thing that is strong is the artificial stock market," he said.

But Insana, the author of four books about Wall Street and an MSNBC contributor, was quick to shoot holes in Trump's theory.

"But if the economy is being propped up, even artificially, how does that square with Mr. Trump's constant assertion that the economy is in the worst shape in the history of the Union?" Insana recently wrote on CNBC.com.

"Mr. Trump offered no rationale, nor an alternative, to the Fed's current policy stance that would keep everything else up, assuming that raising rates would make a real stock market out of our current 'artificial' one," Insana wrote.

"The stock market being artificially propped up by the Fed doesn't entirely square with reality, despite that constant complaint from stock market bears," Insana wrote. "His argument seems more politically motivated than economically sound," Insana wrote.

Fed Chair Janet Yellen said last month that the U.S. central bank was getting closer to raising interest rates, possibly as early as September, saying that the Fed sees the economy as close to meeting its goals of maximum employment and stable prices.

The Fed raised interest rates last December for the first time in nearly a decade, and at that time projected four more hikes in 2016. The Fed later scaled back that projection to two rate hikes this year in the wake of a slowdown in global growth and continued financial market volatility.

"A rate hike might help Mr. Trump's political aspirations, if, for instance, the market tumbled and the economy weakened just as the election approaches," Insana wrote. "But, as with many of Mr. Trump's businesses endeavors, he would be helped immeasurably from a downturn, while his most important constituents, average Americans, would sadly and, as always, foot the bill," Insana predicted.

The Fed has been a target of some conservative critics in the U.S. Congress, who say the bank risked sparking inflation with its easy monetary policies in response to the global financial crisis.

Trump "also breaks with a long-held tradition of presidential candidates, and sitting presidents, to, at least publicly, refrain from telling the Fed what to do," Insana explained.

Trump "has also, on multiple occasions, suggested the U.S. stock market is unsafe, further undermining the already declining faith in U.S. markets," Insana said.

Fed officials say their independence is critical to making sound policy decisions.

Democratic presidential candidate Hillary Clinton criticized her Republican rival for making comments about the Fed's monetary policies, which she said should be off-limits for U.S. presidents and presidential candidates.

"You should not be commenting on Fed actions when you are either running for president or you are president," Clinton told reporters on her campaign plane. "Words have consequences. Words move markets. Words can be misinterpreted," she said.

"He should not be trying to talk up or talk down the economy, and he should not be adding the Fed to his long list of institutions and individuals that he is maligning and otherwise attacking," she said.

(Newsmax wire services contributed to this report). 

© 2023 Newsmax Finance. All rights reserved.

CNBC's Ron Insana says Donald Trump wants the Federal Reserve to hike interest rates for all the wrong reasons.
donald trump, ron insana, fed, rate hike
Thursday, 08 September 2016 07:34 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved