"We're down a tremendous amount", Trump told CNBC's Joe Kernen in a "Squawk Box" interview recorded Thursday, about trade imbalances with China. So the Fed's rate hikes have lit a fire under the US dollar, something which tends to widen the country's trade deficit as foreign countries with weaker currencies become much cheaper to import from. The president said China had harmed the U.S.by deflating its currency to suppress the price of Chinese goods and violating trade laws.
Trump's criticism of the Fed departs from the norm of recent decades of respecting the central bank's independence.
Not until Paul Volcker took over the Fed almost a decade later and ratcheted up interest rates in what is known as the "Volcker Shock" would the issue be truly corrected. "But at the same time I'm letting them do what they feel is best", he added.
But JPMorgan economist Michael Feroli advanced an interesting alternate theory: Trump's comments may inspire the Fed to go the other direction. Its rate hikes are meant to prevent the economy from overheating and igniting high inflation.
The White House also attempted to assuage fears of the president pressuring the Fed immediately after Trump's comments were released.
Trump continued: The United States should not be penalized because we are doing so well.
Former President Richard Nixon was criticized for bullying the Fed into keeping interest rates low, pressure that led to debilitating inflation. And because we live in a reality where logical human behavior reigns supreme, the president has remained demure on all Fed-related topics this morning... "Because we go up and every time you go up they want to raise rates again, and I don't really-I am not happy about it".
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He wants the growth to continue and anxious that interest rate hikes will rein in investments.
Treasury yields and the dollar edged lower following the cable network's broadcast of that excerpt of its interview with the president.
Because it is longstanding policy for the Fed to be independent, presidents in the past have been hesitant to comment on its decisions.
"I'm not doing this for politics, I'm doing this to do the right thing for our country", Trump said.
Past efforts to apply political pressure on the Fed have sometimes hurt the economy.
Trump regularly claims that his policies, especially tax cuts enacted by Congress last December, have created jobs and economic growth.
"Uncertainty over the White House's dollar policy will certainly sow renewed seeds of doubt into global investors", Viraj Patel, foreign exchange strategist at ING, wrote in a report.