Trump About to Take over the Fed

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But, whenever he does this (if he does it), he better blitz them out of the blue. No half measures.

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“Central banks with intervention from the executive branch, such as Argentina, Brazil and some Asian and African countries, have done poorly in controlling inflation and hurt economic growth,” he said.

Central banks raise interest rates to prevent high inflation by keeping the economy from overheating.

The Fed has been inching up interest rates recently because the U.S. economy is doing better. Trump frequently boasts about the economic improvements, even exaggerating, as he did in the CNBC interview, that “it's maybe as good as it's ever been.”

In his Fed comments, Trump complained that the higher interest rates, which still are historically low, are pushing up the value of the dollar.

Foreign investors are attracted to countries that pay higher interest rates, spiking demand for the country’s currency. However, a stronger dollar makes U.S. goods more expensive overseas, hurting exports. At the same time, the Chinese currency has fallen, which makes its exports cheaper around the world.

Economists pointed out that part of the reason China’s currency has dropped recently is the trade war Trump has started with them.

He escalated that battle Friday by reiterating a threat he made this month to slap tariffs on all of the roughly $500 billion in Chinese goods the U.S. imports each year.

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