Defying President Donald Trump and flashing its independence, the Federal Reserve on Wednesday raised a key interest rate a day after the president — breaking with past chiefs executive — said such a move would be a “mistake.”
The Fed announced it will boost its target federal funds rate by a quarter percent, to a range of 2.0 to 2.25 percent.
That announcement comes after Trump on Tuesday took to Twitter to warn the financial body to leave rates alone. The president has long described himself as a believer in low interest rates as an economic propellent.
“I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake,” he wrote Tuesday, referring to that paper’s editorial board also voicing opposition to a rate hike.
I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!— Donald J. Trump (@realDonaldTrump) December 18, 2018
Some Democratic lawmakers and other Trump critics have warned of the implications of the president influencing the Fed, which is supposed to operate independently.
On Nov. 27, Trump slammed Federal Reserve Chairman Jerome Powell, blaming him for a stock slide and General Motors’ job cuts — and expressing regret over tapping him for the job.
“I’m doing deals and I’m not being accommodated by the Fed,” Trump told the Washington Post last month. “They’re making a mistake because I have a gut and my gut tells me more sometimes than anybody else’s brain can ever tell me.
“So far, I’m not even a little bit happy with my selection of Jay. Not even a little bit,” Trump said. “And I’m not blaming anybody, but I’m just telling you I think that the Fed is way off-base with what they’re doing.”
During the interview the president deflected blame for a slowing U.S. economy, instead blaming Powell’s decision to hike interest rates and other moves as Fed boss.
Trump has been more outspoken than his predecessors in criticizing the Fed. But his top economic adviser, Lawrence Kudlow, told a group of reporters Tuesday morning that his boss has never suggested trying to get rid of Powell.
Randy Walerius contributed to this report.