Richard Fisher advised Fed Chair Jerome Powell to ignore the president's comments
A former member of the rate-setting Federal Open Market Committee (FOMC) has described President Donald Trump’s attempts to influence monetary policy as “inappropriate,” and advised Federal Reserve Chairman Jerome Powell to ignore them.
Former Dallas Fed President Richard Fisher told CNBC that Trump was acting against his own best interest by complaining about the Fed hiking interest rates. Fisher was president and CEO of the Dallas Fed from 2005 to 2015
In an interview with Reuters, Trump said the Fed should do more to contribute to boosting the economy, adding that he was not “thrilled” with Powell’s plan to continue rate increases.
While Fisher attributed the booming economy in part to Trump’s deregulation drive and recent tax reform, he cautioned that a future downturn in the business cycle will require mitigation by the US.
"I don't understand what the president is doing here," Fisher said in an interview.
"You want to be able to prolong the business cycle by easing rates when the time comes after the economy begins to roll over. So it's not in his interest, in my view, to criticize the Federal Reserve," he said.
In a July interview with CNBC, Trump expressed frustration with interest rate hikes, adding that the Fed might disrupt the economic recovery. He reiterated his criticism of the Fed’s monetary policy in a tweet the following day.
The FOMC has hiked rates twice so far in 2018 and has indicated that there will be two more increases before the year ends.
