The Washington PostDemocracy Dies in Darkness

The Federal Reserve took Donald Trump’s advice on interest rates. Now he’s not happy.

As a presidential candidate, Donald Trump warned about “artificially low” interest rates. Now, as president, Trump wants interest rates to stay low. (Video: JM Rieger, Elyse Samuels/The Washington Post)
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As stocks headed for their worst December since 1931 this month, President Trump did what President Trump often does: turned to Twitter to vent.

“The only problem our economy has is the Fed,” Trump tweeted as markets experienced their worst Christmas Eve in decades. “The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!”

Perhaps more than any of his predecessors, Trump has tethered the success of his presidency to the stock market. With markets down for the year, Trump has turned his ire to what he believes is causing the market downturn: the four Federal Reserve rate hikes in 2018.

Ironically, Trump is blaming the man he appointed less than a year ago for the hikes (even while claiming he is not blaming him). And perhaps even more ironic is that the Fed is heeding Trump’s past advice on interest rates, which you can watch in the video above.

“We have a big, fat bubble coming up, you watch. We have artificially induced low interest rates,” Trump told MSNBC’s “Morning Joe” two days after announcing his candidacy in 2015. “I borrow money … you pay like nothing; they give you free money. Now that’s bad, that’s not good.”

This month, Trump asked advisers about firing Fed Chairman Jerome H. Powell over rate increases, even after he baselessly accused President Barack Obama of forcing the Fed to keep rates low two years prior (Trump “now realizes he does not have the authority” to fire Powell, acting White House chief of staff Mick Mulvaney said Sunday).

“The interest rates are kept down by President Obama; I have no doubt that that’s the reason they are being kept down,” Trump told CNBC on Sept. 12, 2016. “I used to hope that the Fed was independent, and the Fed is obviously not independent. It’s obviously not even close to being independent.”

Trump’s attacks on the Fed picked up as markets declined in 2018, but the Fed’s rate hikes also coincided with mixed results from four Trump economic policies in 2018: deficit-fueled tax cuts and spending increases, multinational trade wars, and reduced immigration, which analysts predict will lead to a labor shortage in the near future. Wall Street analysts say these policies and Trump’s unpredictability have contributed to the market downturn and could lead to a recession ahead of the 2020 elections.

But even with historically low interest rates, Trump has called the Fed his “biggest threat,” which could be true for Trump personally: Each of the seven rate hikes since he took office could be costing the Trump Organization millions from interest payments on variable-rate loans it holds.

“I’m worried about the fact that they seem to like raising interest rates. We can do other things with the money,” Trump said in September. “Basically, I’m a low-interest-rate person, I hate to tell you.”