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Trump says U.S. economy 'handcuffed' by Fed, wants further rate cut

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Trump says U.S. economy 'handcuffed' by Fed, wants further rate cut
U.S. President Donald Trump talks to reporters as he departs for travel to New York and New Jersey from the South Lawn of the White House in Washington, U.S., August 9, 2019. REUTERS/Leah Millis   -   Copyright  LEAH MILLIS(Reuters)
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WASHINGTON (Reuters) – U.S. President Donald Trump on Friday called on the Federal Reserve to lower interest rates by a full percentage point, saying the nation’s economy was being “handcuffed” by the U.S. central bank’s monetary policy.

Trump, speaking to reporters at the White House, said a strong U.S. dollar was hurting American manufacturers and that the Fed needed to lower rates further despite its cutting rates last month for the first time since 2008.

A full percentage point cut would be even more aggressive than the three 0.75 percentage-point reduction bond investors currently expect the Fed to make in small steps between now and January.

The Republican president did not give any other details about how he would want the Fed to proceed on carrying out such a drastic reduction.

Delivered all at once, a full percentage point would be dramatic – the sort of step associated with a severe economic shock, as opposed to the quarter-point increments that the Fed tends to rely on to fine-tune its target interest rate.

On July 31, the Fed cut its target interest rate by 25 basis points to 2.00-2.25%, citing implications of global developments for the U.S. economic outlook and muted inflation pressures.

(Reporting by Roberta Rampton and Jonas Ekblom; Additional reporting by Howard Schneider; Writing by Susan Heavey; Editing by Steve Orlofsky and Dan Grebler)

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