Trump appears to admire Germany's negative yields, says country is 'being paid to borrow money'

Key Points
  • President Trump expresses admiration for Germany and its negative interest rates.
  • He tweets that Germany is getting "paid to borrow money" and asks, "WHERE IS THE FEDERAL RESERVE?"
  • It was Trump's second blast at the Fed in a hour hours.
Central banks in a race to zero, economist says

President Donald Trump turned his attention Wednesday to the German bond market, seemingly praising its negative rates that make it appear the country is being "paid to borrow money."

In a second-round of tweets aimed at the U.S. central bank, the president asked, "WHERE IS THE FEDERAL RESERVE?" He said the U.S. is a "far stronger and more important credit" than Germany yet continues to pay yield on its government debt, which has increased to $22.4 trillion. The president also noted that the Fed has "just stopped (I hope) Quantitative Tightening."

And he repeated an assertion he made earlier in the morning of this being the "Strongest Dollar in History," which is inaccurate.


German government bonds, known as bunds, are yielding below zero across the entire yield curve as part of a global trend that now entails about $16 trillion of negative-yielding sovereign debt.

The country, however, isn't actually getting paid to borrow. Instead, the negative yields reflect the high premium investors have been willing to pay for bunds in hopes of getting capital appreciation when the price of the bond goes up. Prices and yields on bonds move in opposite direction.

Trump has long sought to get the Fed to lower rates more aggressively, even after it approved a quarter percentage point cut at its July meeting.

In recent days, he called Fed Chairman Jerome Powell "clueless," and has a "horrendous lack of vision," and earlier Wednesday morning likened him to a "golfer who can't putt."

The Fed's next meeting is Sept. 17-18.

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