Trump escalates war of words with central bank boss

Donald Trump has stepped up his attacks on Federal Reserve chairman Jerome Powell, comparing him to a bad golfer and blaming the US central bank for slow economic growth.

On Twitter, the US president accused Mr Powell of “letting us down”, describing him as “a golfer who can’t putt, has no touch”.

“Doing great with China and other Trade Deals. The only problem we have is Jay Powell and the Fed,” Mr Trump added.

In July, the central bank cut interest rates for the first time in a decade. Minutes from that Federal Open Market Committee (FOMC) meeting are due on Wednesday.

Investors are watching closely for hints of further rate cuts.

The issue of interest rates has dogged the relationship between the president and the central bank chair since Mr Powell assumed the role of chair.

Mr Trump has reportedly been frustrated with the Federal Reserve’s decision to gradually raise interest rates from historic lows following the 2008 financial crisis.

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In an interview with ABC in June, Mr Trump said that GDP growth would have been “at least a point and a half higher” under a different chair who wasn’t set on raising rates.

The president has repeatedly criticised Mr Powell, describing him earlier this month as “clueless”, while blaming the central bank’s policies for warning signs of a looming recession.

WASHINGTON, DC - JULY 10: Federal Reserve Chairman Jerome Powell arrives to testify during a House Financial Services Committee hearing on Capitol Hill on July 10, 2019 in Washington, DC. Powell is testifying on monetary policy and the state of the economy. (Photo by Zach Gibson/Getty Images)
Image: Mr Powell was picked by the president to head the Federal Reserve in November 2017

He reportedly explored the option of firing Mr Powell in June, but backed down after being warned by his advisers that the move could potentially be catastrophic for investor confidence, according to Bloomberg News.

Mr Trump himself picked Mr Powell to succeed outgoing chair Janet Yellen in November 2017.

Despite being nominated by the president, the Federal Reserve is supposed to be shielded from political intervention, allowing it to make independent, long-term decisions.

Markets were rebounding on Wednesday, with S&P 500 climbing by over 21% ahead of the release of the FOMC minutes.

Source: SKY NEWS

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