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- President Trump slammed the Fed for raising interest rates in 2017 and 2018.
- He accused the Fed of hindering the economy and stock market in a CNBC interview.
- The economy would be growing faster and the stock market could be more than a third higher if the central bank hadn’t hiked rates, Trump said.
- “Had we not done the big raise on interest, I think we would have been close to 4%,” Trump said.
- “I could see 5,000 to 10,000 points more on the Dow. It was just a big mistake.”
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President Donald Trump blasted the Federal Reserve for raising interest rates in 2017 and 2018 and accused it of hindering the US economy and stock market in a CNBC interview on Wednesday at the World Economic Forum in Davos.
Trump said the US economy would be growing much faster and the benchmark Dow Jones stock index would be 17% to 34% higher if the central bank hadn’t raised rates, which made borrowing more expensive and saving more attractive.
“Had we not done the big raise on interest, I think we would have been close to 4%,” Trump told CNBC. “I could see 5,000 to 10,000 points more on the Dow. It was just a big mistake.”
The Fed raised rates three times in 2017 and four times in 2018. It switched direction last year with three cuts.
“That was a big blip that should not have taken place,” Trump said about the hikes. “It should not have happened.”
Trump added that “very unusual” events such as the grounding of the Boeing 737 Max and strike at General Motors also hindered economic growth.
The president’s growth claim is bullish, given the International Monetary Fund expects the US economy to grow 2% in 2020, down from 2.3% in 2019. His stock-market prediction is also optimistic as the Dow — comprised of 30 blue-chip stocks including Apple, Nike, and Walmart — currently trades at close to a record high after climbing 22% in 2019.
Trump has repeatedly criticized Fed Chair Jerome Powell for hampering the US economy and stock market by cutting rates too slowly.
“Powell let us down,” he tweeted last July. “No guts, no sense, no vision,” he tweeted in September.
