White House trade adviser Peter Navarro agreed with President Donald Trump’s recent smackdowns of Federal Reserve chairman Jerome Powell, saying Powell hiked interest rates too often and too fast.
While the U.S. economy has remained resilient despite the artificial manipulations, Navarro says Powell’s repeated quantitative tightening muted what could have been an even-more spectacular expansion.
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
When asked by Fox Business host David Asman if he agreed with Trump’s angry tweet calling Jerome Powell an “enemy,” Navarro said he understood the president’s frustration.
“[Powell] certainly is destroying a healthy growth rate in this country with his interest-rate policies and his seeming pride at not acknowledging what was a severe mistake,” Navarro said on Lou Dobbs Tonight.
“He blames [stock market turmoil] on trade tensions, when everybody knows that if rates go up and our currency goes up, our exports gotta go down and our growth has to go down.”
(Source: Lou Dobbs Tonight)
What Navarro was referencing is the fact that Fed chairman Jerome Powell raised interest rates 7 times during Trump’s two-and-half-year presidency; and hiked them four times in 2018 alone. The most recent rate hike in December 2018 caused an immediate market crash.
In contrast, the Fed increased rates just once during Barack Obama’s entire 8-year presidency. That’s why President Trump complained about Powell’s repeated rate hikes over a very short period of time.
That said, it bears noting that Trump appointed Powell. Moreover, it’s never a good look for the U.S. president to undermine his own Fed chair or the independence of the U.S. central bank.
However, Powell’s defiant assertions that he would not resign if Trump asked him to are totally out of line. The Fed chair serves at the pleasure of the president. So Powell needs to know his place.
Meanwhile, other central banks around the world are lowering their rates to protect their economies while the U.S. media bash Trump for wanting the Fed to protect U.S. economic expansion.
Predictably, the media rarely credit Trump for all the record-setting stock market rallies that exploded under him. However, they are quick to blame him whenever the financial markets plunge, as they did yesterday (August 23).
That said, yesterday’s stock market plunge of 2.37% doesn’t even crack the top 20 in terms of largest one-day Dow percentage declines. So it’s important to maintain perspective, especially since the media is apparently trying to trigger a recession by fear-mongering.
The media is blaming Trump for being too hard while negotiating with China, but said nothing when Obama escalated trade wars and imposed tariffs on China during his tenure.
Obama caved in and emboldened China.
Where was the media outrage when Obama (unsuccessfully) stepped up trade war with China? After China stood their ground, Obama caved. That’s why they lost respect for him. pic.twitter.com/ew2g9l1iwU
— Samantha Chang (@samantha_chang) August 23, 2019
Everyone agrees that China has been stealing intellectual property for decades and has enjoyed a lopsided trade relationship with the United States, and this has to be addressed.
The Chinese economy has soared during the past couple of decades, aided in large part by the United States. But never forget who’s the Big Dog:
Top 10 Biggest World Economies by GDP
1. United States – $19.39 trillion
2. China – $12.24 trillion
3. Japan – $4.87 trillion
4. Germany – $3.67 trillion
5. UK – $2.62 trillion
6. India – $2.60 trillion
7. France – $2.58 trillion
8. Brazil – $2.05 trillion
9. Italy – $1.93 trillion
10. Canada – $1.65 trillion
You know President Trump is doing the right thing when Senate Minority Leader Chuck Schumer praises him for his tough stance toward China.
Hang tough on China, President @realDonaldTrump. Don’t back down.
Strength is the only way to win with China. https://t.co/pZqeR346ov
— Chuck Schumer (@SenSchumer) May 5, 2019
“We have to be really tough on China,” Schumer said earlier this month. “They have taken advantage of us. America has lost trillions of dollars and millions of jobs because China has not played fair. And being tough on China is the right way to be.”