Trump Slams Federal Reserve Board for 'Politically Motivated' Rate Decisions
President Donald Trump has criticized the Federal Reserve's board of governors for making rate decisions that he believes are motivated by politics, rather than economic conditions. Speaking to reporters on Wednesday, Trump stated that the board is 'inherently political' due to its composition of appointees from various administrations, including his own.
Trump specifically exempted Fed Chair Kevin Warsh from blame, praising him for doing a good job since taking office in May. However, he claimed that other board members are influenced by their partisan leanings when voting on interest rates.
The president's comments came as the Federal Open Market Committee (FOMC) released its July meeting minutes, which showed that many officials believed higher rates were necessary unless inflation improved significantly. The FOMC voted 9-3 to maintain rates within a 3.5% to 3.75% band, with three regional bank leaders dissenting in favor of a quarter-point increase.
Trump also pointed out that the U.S. has higher interest rates compared to countries like Switzerland, which he claimed is due to 'excessively high' rates set by the Fed board. He expressed his authority to sever business ties with such countries and stated that he does not perceive a bond market issue in the U.S.