Trump's Tweets on the Federal Reserve and Interest Rates

Dec 4

Dec 4 Trump's Tweets on the Federal Reserve and Interest Rates

Trump’s Tweets

Before becoming president, Donald Trump was warning about inflation. Now that he is president, he wants the Fed to print money and lower interest rates. No wonder central banks and nations are buying gold.

On Dec 2nd at 3:19 PM, President Donald Trump tweeted,[1]

“Manufacturers are being held back by the strong Dollar, which is being propped up by the ridiculous policies of the Federal Reserve - Which has called interest rates and quantitative tightening wrong from the first days of Jay Powell.”

On the same day at 4:21 PM, Trump tweeted,[2]

“The Fed should lower rates (there is almost no inflation) and loosen, making us competitive with other nations, and manufacturing will SOAR! Dollar is very strong relative to others.”

To use my favorite quote from Ludwig von Mises,[3] of whom Milton Friedman said, “There is no doubt in my mind that no one has done more, to spread the fundamental ideas of free-markets than Ludwig von Mises,”[4]

“The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

Indeed, here is Donald Trump tweeting his implicit agreement with Mises in 2013,[5]

“The Fed’s pumping is great news in the short term but it can’t last forever. Be prudent in your market investing.”

Again, Donald Trump agreed with Mises in a debate with Hillary Clinton in 2016,[6]

"Believe me: We're in a bubble right now. And the only thing that looks good is the stock market- but if you raise interest rates even a little bit, that's going to come crashing down. We are in a big, fat, ugly bubble. And we better be awfully careful.” -Trump in a presidential candidate debate with Hillary Clinton, Sept 2016.

It is an open secret that central banks, who have been printing money at a historic scale since the Great Recession in 2008, will continue to print money to keep interest rates low.

Speaking with the Financial Times, Federal Reserve Bank of Boston president Eric Rosengren said that the Fed’s goal of 2% inflation was falling short so sometimes they would need inflation (money printing/lowering interest rates) above 2% in the future. To quote,[7]