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President Donald Trump, in his most brazen attack yet on the Federal Reserve, called for the central bank on Tuesday to cut interest rates by 1 percentage point and to implement more money-printing quantitative easing.
In a two-part tweet, the president unfavorably compared the Fed to its China counterpart and said if monetary policy in the U.S. was looser, the economy would "go up like a rocket."
In the past, White House officials including Trump and top economic advisor Larry Kudlow have recommended the Fed cut rates by half a point. The tweets literally doubled down on that approach.
The Fed currently targets its benchmark interest rate in a range between 2.25% and 2.5%. It has hiked the rate nine times since December 2015, though it indicated in March that it likely is done with increases for the rest of 2019 despite forecasting two more at the end of last year.
Following the president's prescription would take the fed funds rate back to its December 2017 level.
The jawboning for rate cuts comes despite another strong economic performance in the first quarter. GDP rose at a robust 3.2% after many economists had been predicting little or no growth ahead of the release.
Growth has come with little inflation. The Fed's preferred gauge showed a gain of just 1.6% over the past year excluding food and energy prices.
That lack of inflation is the reason Kudlow and others believe the Fed can cut rates without risk. Central banks normally tighten policy in an effort to control prices when the economy is expanding.
While it is not unusual for presidents to criticize monetary policy, it historically has been done quietly, making Trump's public condemnations of Chairman Jerome Powell and his colleagues atypical.
Along with multiple calls for rate cuts, this is Trump's second demand for more QE.
The Fed instituted three rounds of easing during and after the financial crisis in an effort to lower long-term rates and encourage the flow of money into risk assets like stocks and corporate bonds. There have been no indications the Fed is contemplating another round of QE, though economists at the St. Louis Fed have been floating the idea of a repurchase facility that some economists say would act as a form of easing.