President Donald Trump launched another barrage of criticism at the Federal Reserve, saying Saturday that the central bank is behind its global peers in the economic fight against the coronavirus.
“I’m not happy with the Fed because I think they’re following not leading, and we should be leading,” the president said during a news conference to discuss the COVID-19 outbreak and the ongoing U.S. response.
Since the disease’s spread has intensified, the U.S. central bank has enacted an emergency interest rate of 50 basis points, opened up a liquidity program to the bank to add up to $1.5 trillion to the financial system and started buying government debt across the yield curve.
Trump said he is not yet looking at removing Jerome Powell as chairman, though he believes he has the right to do so. He has harshly criticized Powell previously, saying the Fed should be more aggressive in easing the stance of monetary policy.
“I have the right to remove him. No, I’m not doing that,” Trump said. “I also have the right to put him in a regular position and put someone else in charge, and I haven’t made any decisions on that.”
Powell’s term as governor runs until 2026; Trump would need cause to remove him from that position.
“We have some tremendous opportunities right now, but Jerome Powell is not making it easy,” Trump said.
The Fed has little room left to cut rates after the intermeeting reduction nearly two weeks ago. Its policy rate is now in a targeted range between 1%-1.25%. Market pricing points to the Federal Open Market Committee taking the rate to near-zero, where it was during and after the financial crisis.
As he has in the past, Trump pointed to other central banks in Europe and Japan that have policy rates less than the Fed’s. The president said that in some cases it is “two points,” which is not accurate. Though some sovereign debt in Europe and Japan carries negative rates, Japan is the only G-7 central bank with a negative policy rate, at -0.1%,
Trump also insisted that the U.S. could “refinance our debt very easily at a much lower rate.”