White House economic adviser Larry Kudlow said in an interview with CNBC on Thursday that the Federal Reserve remained independent and U.S. President Donald Trump is not dictating policy to the Fed.
Kudlow's remarks to CNBC came hours after Trump criticized the Fed for raising interest rates too quickly, in his second attack against the central bank in the past 24 hours.
President Donald Trump launched a second day of criticism against the Federal Reserve on Thursday, calling its interest rate increases a “ridiculous” policy that was making it more expensive for his administration to finance its escalating deficits.
“I’m paying interest at a high rate because of our Fed. And I’d like our Fed not to be so aggressive because I think they’re making a big mistake,” Trump said in a Thursday morning interview on Fox & Friends.
It was his second broadside against the U.S. central bank in the last 24 hours, following a sell-off on Wall Street partly attributed to investors fully adjusting to the central bank’s steady rate increases, and an uptick in particular in yields on long-term U.S. Treasury bonds that are an important, more secure alternative to stock investments.
Past presidents have criticized their central bankers, but this was an unusual run of invective even for Trump. Since the close of Wednesday’s trading session on Wall Street he has called the Fed “crazy,” “loco,” “ridiculous,” and “too cute,” while saying its rate increases are “too aggressive,” and “a big mistake.” U.S. stocks opened lower on Thursday.
“The problem that I have is with the Fed. The Fed is going wild. I mean I don’t know what their problem is but they are raising interest rates and it’s ridiculous,” Trump said late Wednesday night. “The problem in my opinion is Treasuries and the Fed. The Fed is going loco and there is no reason for them to do it and I’m not happy about it.”
A Fed official said the central bank would not comment on the president’s remarks.
Kudlow didn't directly address Trump's remarks but said the administration knows the Fed has a job to do.
“The president has his own views. He’s stated them many times. There’s nothing new here as far as I can tell,” Kudlow told CNBC’s “Squawk on the Street.
“We all know the Fed is independent. The president is not dictating policy to the Fed. He didn’t say anything remotely like that,” said Kudlow.
And throughout numerous media appearances, Kudlow continued to explain Trump's mindset.
“He has never attacked the Fed’s plan or strategy,” Kudlow told reporters on the White House lawn Thursday. “He has never interfered with that. He is giving his opinion, and it’s an informed opinion.”
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