Since Trump won the election in 2016, the economy has been steadily improving, but Trump’s biggest threat could bring it all down.
Tuesday, President Trump told Fox Business that, “My biggest threat is the Fed, because the Fed is raising rates too fast.”
The independent central bank doesn’t answer to the President, but it is clear Trump is worried that the Federal Reserve is raising rates too quickly, and he might have a point.
During Obama’s time in office, even after the great recession, the Federal Reserve raised the interest rates just three in eight years. They enacted a .25% raise in 2011, another .25% in December of 2015 and after the 2016 election, raised it once more.
Since Trump took office, the Federal Reserve has raised the interest rates have been raised six times in the last year and a half from 1.25% to 2.75%. They have over double the rates in the past nineteen months.
Normally, sitting presidents don’t’ criticize the Fed, but Trump isn’t a normal president. Trump understands that if the rates rise too quickly it could stall the growth of the economy and severely damage Trump’s political power.
Without a booming economy, Trump’s critics will be much more effective in trying to replace him in 2020. The growing economy has been Trump’s greatest highlight since being elected. If that is taken away, then Democrats could easily win the next presidential election.
Trump may feel like the Fed can sabotage all his work, and they might be able to, but the independent agency isn’t going to change what they are doing just because Trump tells them to. But, the attention that Trump is giving the Fed will cause more eyes to be focused on the central bank and its decisions, and that is a good thing.
What are your thoughts? Do you think the Fed is raising the rates too fast? Is the Fed Trump’s biggest threat? Let us know in the comments below.
