On Monday morning, President Donald Trump reiterated his insistence that the Federal Reserve not raise interest rates. The Federal Open Market Committee is scheduled to meet on Tuesday and are widely expected to announce further rate hikes. As a pre-emptive move, Trump tweeted:
Trump’s habit of trying to push the Federal Reserve to do his bidding is a break from the long tradition of presidents respecting the independence of the central bank.
As Bloomberg notes, Trump’s public castigations run the risk of undermining attempts by the American government to convince the world that the central bank makes decisions based on policy imperatives rather than domestic politics. “U.S. officials have struggled for decades to convince suspicious foreign counterparts about the separation of powers,” the news outlet observes. “They’ve characterized Fed policy as the response of an independent central bank to domestic conditions, not a projection of U.S. might. They didn’t persuade all of the people all of the time—but the framing was central to America’s ability to lead by example.”
New York Times reporter Binyamin Appelbaum suggests that Trump’s move is likely to backfire:
Economist Paul Krugman agrees, and adds that Trump’s move is wrongheaded even if he is right about the policy outcome he wants: