Top Trump economic adviser Larry Kudlow called on the Federal Reserve Friday to cut interest rates in anticipation of a possible economic slowdown next year.
The National Economic Council director said in an interview on CNBC that recent data on the markets for U.S. debt hint at speed bumps in about a year. “We’re not there yet, we’re not a year ahead, but it’s something you have to watch,” he said.
He then called on the Fed to cut its interest rate target by half a percentage point. “All’s I’m saying is, we want to open that throttle,” he said. The Fed’s target rate is currently 2.25 percent to 2.5 percent.
When asked whether President Trump is unhappy with Fed Chairman Jerome Powell, a Trump appointee, Kudlow responded: “He’s our chairman, we’re not going to displace him.”
“It is up to the Fed,” he continued. “I’m not here to criticize the Fed. I’m just saying this is our point of view.”
Trump has criticized the Fed in an unusually public manner, calling on the central bank, which was created to make economic decisions independent of politics, to keep rates low. The Fed has been raising rates in recent years in an effort to restore them closer to historic norms.
Fed’s announced pick for the Fed’s board of governors, Stephen Moore, is a close friend of Kudlow. Moore has echoed Trump’s call for lower rates in recent months, calling on Powell to resign. He would vote on those interest rate decisions if formally nominated to the board by Trump and confirmed by the Senate.
The Fed recently downgraded its forecast for economic growth this year, from 2.3 percent to 2.1 percent GDP growth, though the central bank still believes the U.S. economy’s fundamentals are strong.
