Trump blames Fed for holding back economic growth in 2018
WASHINGTON (AP) — President Donald Trump says the economy would have grown much faster last year if the Federal Reserve had not been tightening credit last year.
In a broadcast interview, Trump said without the Fed’s rate hikes last year and moves to trim its bond holdings, the economy, as measured by the gross domestic product, would have grown by over 4 percent.
The GDP on an annualized basis grew by a solid 2.9 percent last year and when measured from the fourth quarter of 2017 to the fourth quarter of 2018, growth was an even stronger 3.1 percent.
Trump’s comments came in an interview with Fox Business Network’s Maria Bartiromo on Thursday. The network released excerpts and the interview will be broadcast Friday.
The Federal Reserve on Wednesday cut its expectations for future rate hikes from two this year to none and also announced a plan to end shrinking its balance sheet in September.
Asked if he felt he had an impact on these decisions, Trump said he had been right but whether his criticism had been a factor in the Fed’s decision “it doesn’t matter. I don’t care if I influenced or not.”
Fed Chairman Jerome Powell has said the Fed’s major shift from hiking interest rates to declaring a long pause in further rate hikes was prompted by a slowing global economy and rising risks to U.S. growth with Trump’s pressure having no impact.
Trump on Thursday also held a closed-door meeting with top business executives at the headquarters of the Business Roundtable near the Capitol. The association was holding its quarterly meeting with an estimated 100 chief executive officers from businesses across the United States.
In a statement, the association said the discussion was “constructive and wide-ranging” and covered a variety of issues including ways to make further progress on regulatory reform and winning congressional passage of the United States-Canada-Mexico trade agreement.
The head of the Business Roundtable is Jamie Dimon, chairman and CEO of JP Morgan Chase. Dimon had boasted last year that he could beat Trump in a presidential race, prompting Trump to label Dimon as someone not smart enough to run the country. Their recent statements, however, have been less harsh.
AP Economics Writer Christopher Rugaber contributed to this report.