President Donald Trump said he expected Jerome Powell to be a cheap-money Fed chairman and lamented to wealthy Republican donors at a Hamptons fundraiser on Friday that his nominee instead raised interest rates, according to three people present.
Trump has publicly lamented the central bank’s recent rate increases, but his private remarks to donors are the most personal criticism of Powell’s performance to emerge so far. The people who described the comments asked not to be identified because the fundraiser was closed to the public.
His jabs built on an attack he leveled at Powell’s Fed in July, when he pronounced himself “not thrilled” with the rate increases. That broadside, in an interview with CNBC, broke with a more than two-decade-old norm of presidents avoiding comments on monetary policy out of respect for the Fed’s independence.
About 60 people attended Trump’s fundraiser at the Southampton home of Howard Lorber, the chairman of hot dog company Nathan’s Famous. Guests included Chicago Cubs co-owner Todd Ricketts; John Catsimatidis Jr., the son of Red Apple Group Chairman John Catsimatidis; Republican National Committee Chairwoman Ronna Romney McDaniel; Commerce Secretary Wilbur Ross; Treasury Secretary Steven Mnuchin; White House Chief of Staff John Kelly; and senior White House aides Jared Kushner and Dan Scavino.
Trump held a discussion with a small group and then made remarks to a larger group over a dinner of salad with chicken in a tent in Lorber’s yard. It was a humid night and Trump joked that Lorber could have afforded better air conditioning, according to one of the people.
Trump Fed History
Trump, speaking at a news conference at his company’s New York City headquarters, also called Fed Chair Janet Yellen “highly political.”
"I have nothing against Janet Yellen whatsoever. I think she's been doing her job," the presumptive GOP presidential nominee said in a wide-ranging phone interview with "Squawk Box."
"I don't know her. She's a very capable person. People I know have a high regard for her. But she's not a Republican," he added. Trump argued for low rates to keep the national debt of $19 trillion somewhat manageable. Calling himself "the king of debt" in his business dealings, he warned that the national debt would be troublesome if the cost of borrowing increases.
"We're paying a very low interest rate. What happens if that interest rate goes up 2, 3, 4 points?" he asked. "We don't have a country." The U.S. should refinance longer-term debt, he added.
Mr. Trump, presumably speaking of Ms. Yellen, said interest rates have been kept low “because she’s obviously political and doing what Obama wants her to do.” Mr. Trump, in an interview on CNBC, added “what they [the Fed] are doing is, I believe, it’s a false market. Money is essentially free.” Ms. Yellen, he said, “should be ashamed of herself.”
President Donald Trump said he likes low interest rates in a meeting with Federal Reserve Chair Janet Yellen and National Economic Council Director Gary Cohn, according to a Tuesday Wall Street Journal report, citing people familiar with the conversation.
Weeks after taking office, Trump told Yellen he believes she is a "low-interest rate" person like himself, the report said.
“He’s strong, he’s committed, he’s smart,” Mr. Trump said in the White House Rose Garden, where he introduced Mr. Powell as his choice.
Mr. Trump said that he respected Ms. Yellen and on Thursday called her “a wonderful woman who has done a terrific job.”
Trump, in an interview with CNBC, said he does not approve, even though he said he "put a very good man in" at the Fed in Powell. “I’m not thrilled,” he told CNBC's Joe Kernen in an interview to air in full Friday at 6 a.m. ET on "Squawk Box." “Because we go up and every time you go up they want to raise rates again. I don't really — I am not happy about it. But at the same time I’m letting them do what they feel is best.” “But I don’t like all of this work that goes into doing what we’re doing.”
Aug 20, 2018 Bloomberg: Expected Powell to be "Cheap Money Chair"
Mike "Mish" Shedlock