President Donald Trump’s persistent calls for the Federal Reserve to lower interest rates are an effort to juice the economy and stock market ahead of the 2020 U.S. presidential elections, according to at least one strategist.
“I think in the President’s ideal world, he gets rates pushed down even lower, gets some good economic news towards the end of summer, because he really wants a strong economy and strong stock market – not necessarily now, he needs it in September, October as people are going to the polls,” Peter Tchir, head of macro strategy at Academy Securities, told Yahoo Finance during The Ticker Thursday.
“So he wants to put as much pressure on the Fed as he can,” Tchir said.
When Jerome Powell started his testimony today, the Dow was up 125, & heading higher. As he spoke it drifted steadily downward, as usual, and is now at -15. Germany & other countries get paid to borrow money. We are more prime, but Fed Rate is too high, Dollar tough on exports.— Donald J. Trump (@realDonaldTrump) February 11, 2020
Earlier Thursday, Trump wrote in a Twitter post during Federal Reserve Chair Jerome Powell’s congressional testimony that the “Fed Rate is too high” and a strong dollar is “tough on exports” for U.S. companies. The current target range for benchmark interest rates is between 1.5% and 1.75%, with the Fed having brought rates down by a cumulative 75 basis points last year.
Trump is not the first president to pressure the Fed to lower rates and boost stocks by bringing down the cost of borrowing for companies. However, his frequent, public calls for lower rates and scathing remarks about the Fed chair he nominated have largely been seen as unprecedented.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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