(Bloomberg) -- President Donald Trump pushed the Federal Reserve to “match” what he said China would do to offset economic hardship being caused by tariffs as he sought to draft the U.S. central bank into his trade war.
“China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing,” the president said in a tweet Tuesday. “If the Federal Reserve ever did a `match,' it would be game over, we win! In any event, China wants a deal!”
His remarks continue the drumbeat of pressure from the White House to get the Fed to add stimulus to the U.S. economy, even though growth is solid and unemployment is at a 49-year low. Fed officials raised interest rates four times last year but have since signaled an extended pause as they wait for a tight labor market to lift inflation that has been persistently too low.
While financial markets expect the Fed to cut interest rates in the next year, Chairman Jerome Powell and his colleagues have indicated they don't see a strong case for a move either way. They've also stressed that they will make moves independent of any political considerations.
Uncertainty caused by the escalating trade dispute has been one cloud on the horizon, with U.S. stocks slumping sharply Monday after China retaliated against import levies that the U.S. imposed last week, even as Trump threatened to do more. Stock futures were higher on Tuesday.
The U.S. Trade Representative’s office Monday released a list of about $300 billion worth of Chinese goods including children’s clothing, toys, mobile phones and laptops that Trump has threatened to hit with a 25% tariff.
