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Politics

Trump's latest scapegoat: The Federal Reserve

Catherine Rampell on

Not this again.

Faced with any sort of self-inflicted crisis, Trump cycles through a series of scapegoats. Among the usual boogeymen (and boogeywomen): immigrants, China, NFL players, Hillary Clinton, House Democrats.

But lately -- and alarmingly, for anyone who cares about the long-term health of the U.S. economy -- the Federal Reserve has entered the rotation with greater frequency.

On Monday, in a rambling, petulant interview on CNBC, Trump once again lambasted the U.S. central bank, which he called "very destructive."

"We have people on the Fed that really weren't, you know, they're not my people," he complained, despite the fact that the people on the Fed are quite literally his people. As in, he formally nominated almost all of them: Four of the five sitting Fed board governors were Trump picks, including Fed Chair Jerome H. Powell, who was first appointed to the board by President Barack Obama and then elevated to chair by Trump.

What Trump meant, of course, is that his "people" haven't shown loyalty to him personally; rather, they are making policy decisions based on their congressionally determined dual mandate, which is stable prices and maximum employment. He contrasted U.S. central bankers' behavior to that of their Chinese counterparts, who he said always obey Chinese President Xi Jinping.

 

"He can do whatever he wants," Trump said enviously. "They devalue, they loosen, or you would just say they pump a lot of money into China, and it nullifies to an extent, not fully -- it nullifies the tariffs."

This is not the first time Trump or his surrogates have argued that the Fed should ditch its legislative mandate in the service of helping the president manage trade (specifically, by cutting rates). Nor is this the only way in which Trump has tried to blame the Fed for, at the very least, insufficiently backstopping his misguided policies.

When stock markets do stomach flips in response to his trade antics, Trump also frequently scapegoats the central bank. For instance, during his recent trip to Japan, Trump -- in between batting his eyes at North Korean dictator Kim Jong Un and insulting his Japanese hosts -- found time to bash the Fed.

"The stock market, as high as it's been, would have been at least, I think, probably anywhere from 7,000 to 10,000 points higher, but they wanted to raise interest rates," Trump told an audience of Japanese business leaders. "You'll explain that to me."

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