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Fed Stimulus Is Creating ‘Phony Numbers’: Trump

Thursday, 13 Sep 2012 | 4:48 PM ET

The Federal Reserve’s decision Thursday to buy $40 billion in mortgage securities each month is creating “phony numbers,” real estate mogul Donald Trump told CNBC’s"Closing Bell."

Donald Trump speaks at the Ritz-Carlton on August 26, 2012 in Sarasota, Florida.
Getty Images
Donald Trump speaks at the Ritz-Carlton on August 26, 2012 in Sarasota, Florida.

Trump said theFederal Reserve’smove to keep interest rates low and provide additional stimulus “will not ultimately benefit the economy.”

“The dollar will go down in value and inflationwill start rearing its ugly head,” he said of the effects of this third round of quantitative easing. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)

It also will do little to spur additional activity in the housing market. “Mortgage rates are already very low,” he said, “but the banks aren’t lending. So it doesn’t make any difference.”

In addition to mortgage rates, these phony numbers are showing up in the stock market. But Trump said he’s benefiting. Trump rattled off a list of stocks he’s bought over the past two years, including Bank of America , Deere , Caterpillar , Procter & Gamble and Johnson & Johnson .

Donald Trump: Bernanke Move Creating False Numbers in Market
Donald Trump, Trump Organization, reacts to the Fed's latest stimulus move and the huge stock market rally.

Trump reiterated a call he’s been making for a while that it remains “a great time to buy a house.” While it’s hard to get financing, Trump suggest homebuyers buy from a bank because the banks want to get rid of foreclosed homes and they’re willing to lend. (Read More: Trump: Housing a Steal, Banks 'Dying' to Sell.)

He also weighed in on the growing unrest in the Mideast and the president’s handling of the situation. Trump, a Mitt Romney supporter, said Obama is the “worst foreign policy president in our history. The world is exploding and everyone is laughing at the U.S.”

Trump added: “He’s done a terrible job yet the polls show he’s up on foreign affairs. I think it’s ridiculous.”

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