Markets

Trump says Fed should cut rates by at least 1% 'with perhaps some quantitative easing'

President Donald Trump raised his demands Monday on the Federal Reserve, calling for the central bank to cut interest rates by a full percentage point and to restart its crisis-era money-printing program.

In a pair of tweets again aimed at getting easier monetary policy, the president said the Fed has been hampered by a "horrendous lack of vision" and said it should institute 100 basis points worth of reductions to its benchmark rate.

Criticizing the Fed is nothing new for Trump, who has stated his desire for a weaker dollar and interest rates that are more competitive with other countries around the world. The Fed approved a quarter-point cut at its July meeting, but that has not stopped Trump from wanting more.

"Our dollar is so strong that it is sadly hurting other parts of the world," he said.

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Trump's approach on trade and the Fed

Trump also has been hammering away at what he calls "quantitative tightening," or the Fed's efforts to reduce the amount of bonds it was holding. The central bank acquired the assets during three rounds of buying during and after the financial crisis, in an effort to tamp down long-range interest rates and to steer money toward riskier assets like stocks and corporate bonds.

In previous shots at the Fed, he has claimed that the Dow Jones Industrial Average would be 10,000 points higher and that the economy would be growing at better than a 4% rate if not for the rate hikes and unwinding of the balance sheet.

His latest tweet again calls for "some" quantitative easing, which is sometimes referred to as "money printing" though it doesn't involve the actual creation of paper currency.

Markets widely expect the Fed to approve another 25 basis point cut at its September meeting, and probably one more before the end of the year.