Trump Slams Fed ‘Boneheads’; Calls For Negative Interest Rates

Sep. 11--He wants to be the hero that pushed interest rates to zero.

President Trump fired a new salvo at the Federal Reserve bankers for not juicing the economy by slashing interest rates to nothing -- or even below.

"Only the naivete of (Fed Chair Jerome) Powell ... doesn't allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of 'Boneheads,'" Trump wrote on Twitter.

Just last week, Trump had said he was not pushing for zero interest rates. Treasury Secretary Steve Mnuchin also insisted Tuesday that the president does not want to oust Powell, whom he appointed.

Trump, who has sounded increasingly antsy about the potential for an economic downturn as the 2020 election looms, wants the Fed to act much more aggressively to keep the economy humming.

Lower rates tend to boost economic growth by encouraging spending. But economists say that if rates are too low, they may artificially inflate values of stocks and other assets, causing bubbles that can result in painful collapses.

With unemployment at historic lows, some bankers say interest rates are low enough already. And cutting them more now would give the Fed fewer tools to get the country out of a recession if one does hit.

Aside from the possible impact on the economy, Trump's proposal also sparked criticism from ethics experts, who noted that he would personally benefit tremendously from lower interest rates because his sprawling real estate empire is financed with major debt.

That type of potential conflict of interest would be a major reason that past presidents have sold their assets or put them in a blind trust. Trump has claimed he is not involved in the day-to-day running of his businesses but maintains ownership in them and regularly promotes them.

___

(c)2019 New York Daily News

Visit New York Daily News at www.nydailynews.com

Distributed by Tribune Content Agency, LLC.