Trump renews pressure on Fed to cut rates 'faster and bigger'

Former Fed Chiefs Unite in Call on Trump to End Powell Threats

US President Donald Trump, in his tweets, pressures the Federal Reserve to cut interest rates, saying that a weaker dollar can help US firms compete.

The war of words between Trump, China and now his own central bank has left investors reeling, with huge gains and declines. They must cut rates bigger and faster and stop their ridiculous quantitative tightening now.

But economists strongly refute this notion and say it is the strength of the U.S. economy compared to others like the slowing eurozone, that has pushed up the value of the dollar.

Stock futures dropped and Treasury futures rose as traders bet this latest escalation of the US-China trade dispute will slow the US economy further, forcing the Fed to respond with deeper rate cuts to ease financial conditions and encourage businesses to hire and spend.

In addition to his comments on the Fed, Trump also called out United States manufacturers Caterpillar, Boeing, and John Deere.

The tweets followed the news that three central banks -in New Zealand, India and Thailand- all announced larger-than-expected cuts to interest rates.

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While the USA economy continues to expand, it is growing at a slower pace.

The Fed most recently lowered its benchmark interest rate last week by a quarter point, to a range of 2 percent to 2.25 percent, which is a historic low.

His tactics to rectify that have included slapping billions of dollars of tariffs on Chinese imports and threatening even more extreme measures, but on Wednesday he blamed the Federal Reserve's interest rate policy for holding the USA economy back. President Trump and his advisors have also repeatedly alleged that the current interest rates were responsible for the dollar's strength against other currencies, and that this harmed USA exports.

Four former Fed chiefs called for keeping the Fed independent from short-term political interference.

"Even the perception that monetary-policy decisions are politically motivated, or influenced by threats that policy makers won't be able to serve out their terms of office, can undermine public confidence that the central bank is acting in the best interest of the economy".

Trump has even reportedly discussed an attempt to remove Powell from his position, raising questions about the central bank's independence.

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