President Donald Trump sought to pressure the Federal Reserve into drastic moves to boost an already-healthy U.S. economy, calling for a steep interest-rate cut and the resumption of bond purchases as the central bank met to weigh monetary policy.

In a pair of tweets Tuesday, Trump criticized the Fed for having “incessantly lifted interest rates” amid “wonderfully low inflation” in the U.S. He also praised China for adding “great stimulus” to its economy and keeping borrowing costs low. He said the U.S. economy could soar “like a rocket” if the central bank would cut rates by a full point — double the reduction that his economic adviser Larry Kudlow has urged.

The last time the Fed reduced interest rates, in 2008, the economy was mired in the worst recession since the Great Depression. Fed Chairman Jerome Powell — appointed by Trump — and his colleagues have repeatedly said they won’t bow to political pressure and are focused on their congressional mandates of stable prices and maximum employment.

Trump’s latest tweets repeat and build on comments almost a month ago where he called for an interest-rate cut — without specifying the magnitude — as well as bond purchases.

Fed officials began their two-day meeting earlier in the day in Washington. They’re expected to leave rates unchanged when they announce their policy decision at 2 p.m. on Wednesday and signal no hurry to adjust borrowing costs in either direction as they weigh the economic outlook. Powell will speak at a news conference 30 minutes later.

That picture has brightened since the Fed’s meeting last meeting six weeks ago, with first-quarter U.S. economic growth coming in at a much-better-than expected 3.2 percent annualized pace. On the downside, a measure of underlying inflation slowed in March to 1.6 percent, below the central bank’s 2 percent target.


Markets Shrug

While previous attacks by Trump on the Fed have at times roiled markets, traders remained relatively unrattled by the latest comments, focusing instead on the possible details of the Fed’s decision Wednesday.

The two-year Treasury yield, down 2 basis points on the day at around 2.27 percent, barely budged and held above the one-month low it touched earlier in the day. The Bloomberg dollar index maintained a decline of around 0.2 percent.

Trump’s comments also link the Fed to the highly charged trade negotiations between the U.S. and China. American and Chinese officials are meeting in Beijing this week for the latest round of talks to end the trade war between the world’s two biggest economies. To cushion China’s economy from the effect of U.S. tariffs, President Xi Jinping’s government has loosened monetary policy and cut taxes.

Persistent Criticism

Trump has long raged at the central bank and Powell over its rate increases in 2018 and, more recently, the Fed’s plans to gradually shrink its portfolio of billions of dollars of Treasury bonds it acquired to fight the 2008 financial crisis.

Officials announced six weeks ago that they would halt that process in September.

One solution, from the president’s point of view, is to appoint political loyalists to counterbalance Powell.


But the withdrawal of one pick — former pizza executive Herman Cain — from consideration for a seat on the Fed board has intensified the scrutiny of his other controversial choice for the central bank, economics writer Stephen Moore. Moore has faced growing criticism — including from several Republican senators — over his previous writing disparaging women and Midwest cities.

While White House aides say the president continues to back Moore, he has yet to be formally nominated and would face a narrow path to confirmation in the Senate. Republicans hold 53 of the 100 seats in the chamber, meaning that if Democrats oppose his selection, as they have suggested they will, he can only afford to lose three Republican votes.

—With assistance from Andrew Mayeda and Benjamin Purvis.