The U.S. economy slowed from 3% growth to 2.1% during the first half of 2019 because the Federal Reserve "raised rates too far, too fast," White House trade adviser Peter Navarro said Friday.
"Fed policy is if you raise interest rates, you cut down investment and you cut down exports," Navarro said during a CNN interview. "It's a big day today because we're going to get better signals from the Federal Reserve as to whether they're going to get in line with over 30 central banks around the world that have been cutting rates."
However, those signals never came. During remarks to financial leaders from around the world gathering in Jackson Hole, Wyoming, on Friday, Powell said the economy is in a "favorable place" and the Fed will "act as appropriate" to keep the current economic expansion on track. However, he did not give any hints about whether the Fed will cut interest rates at its next meeting.
The Fed cut its interest rates by a quarter-point on July 31, but President Donald Trump wants a full percentage point cut.
"If the Federal Reserve raises rates 100 basis points and our currency goes up by 10%, we have to agree that our exports are going to go down," Navarro said Friday. "And if they do, we lose our growth. We're seeing that in the data."
Meanwhile, there are still talks going on about whether Trump will restore tariffs delayed earlier this month, but the news that China had imposed additional tariffs on the United States was well-signaled, said Navarro.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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