Mubasher: US President Donald Trump lashed out at the Federal Reserve for raising interest rates quickly, giving China an edge in trade talks.
“We should be entitled to have a fair playing field, but even without a fair playing field — because our Fed is very, very disruptive to us — even without a fair playing field we are winning,” President Trump told CNBC.
Trump complained that the Fed “raised interest rates far too fast,” attacking policymakers for hiking the rates “the day before a bond issue goes out, so we have to pay more money.”
Trump also criticised the Fed for not “listening” to him, referring to his Chinese counterpart Xi Jinping’s control over the central bank.
“The head of the Fed in China is President Xi,” Trump said, shedding light on the devaluating of the yuan (CNY) and loosening monetary policy to mute the burden of tariffs.
It is worth noting that the People’s Bank of China (PBoC) lacks the political independence of peers like the Fed, where any decision must be approved first by the Chinese government.
China have been devaluing the yuan for years, giving it a “tremendous advantage” the US does not have because the Fed “doesn’t lower interest rates,” Trump said.
The Fed raised interest rates four times last year in response to a solid economic growth and decades-low unemployment, but held them at their current levels since last December.
Last week, however, Fed Chairman Jerome Powell opened the door for a rate cut, should the trade tensions prompt US businesses to scale back investment and hiring.