Imagine the nation’s no. 1 criticising the Central Bank’s policies for being opposite of the economy. Actually, the government and the central bank should NOT have the same opinion all the time or the central bank following the government’s direction for example. So, which no.1 of a country is criticizing its central bank? Nope, not in Malaysia, we are just a top 25 largest trading nation in the world. Our Bank Negara Malaysia (BNM) has been quite pro-active thus far. This issue actually happened in the largest trading nation in the world, the U.S.
Article in thehill.com President Trump labelled the Federal Reserve as the “most difficult problem” the U.S. faces. He criticized it for raising interest rates. He said, “Strong jobs report, low inflation, and other countries around the world doing anything possible to take advantage of the United States, knowing that our Federal Reserve doesn’t have a clue!” Trump tweeted late Friday night. “They raised rates too soon, too often, & tightened, while others did just the opposite.”
“As well as we are doing from the day after the great Election, when the Market shot right up, it could have been even better – massive additional wealth would have been created, & used very well,” he continued. “Our most difficult problem is not our competitors, it is the Federal Reserve!”
Trump wanted the Federal Reserve to lower interest rates to stimulate the economy and aid his trade battles while inflation remains low. His other comments.
“If we had a Fed that would lower interest rates, we’d be like a rocket ship, but we’re paying a lot of interest and it’s unnecessary. But we don’t have a Fed that knows what they’re doing, so it’s one of those little things. But if we had a Fed that would lower rates, you would have a rocket ship.”
The Fed has increased interest rates nine times since 2015 — seven times since 2017 and four times under Powell, who took over as chairman in 2018 after Trump nominated him to the job. Its a long article. Do read it here at Article in thehill.com
President Trump is a famous personality. He started a trade war with China and fortunatelyfor the world, thats in a truce at this moment. When the economy is not doing well, it will also affect the property market too. This is what happens when people feel negatively affected and the sentiment may turn negative too. I think the Federal Reserve believe the U.S. economy is still growing strongly and this was it continues to increase the rates on a quarterly basis. It may not want any speculative growth. I do believe President Trump thinks the same. However, he prefers for the rates to be reduced so that it could drive the economy higher. Well, we will just have to keep following. The U.S. is still the largest trading nation in the world.
<Featured Image is courtesy of Stock Photos from Thomas Barrat>
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