President Trump blasted the Federal Reserve on Thursday as stocks plunged amid rising concerns about a second wave of coronavirus cases and a stark warning from Fed Chairman Jerome Powell.
In a late morning tweet, Trump insisted the Fed was underestimating how quickly the U.S. economy would rebound from the pandemic-driven recession and how soon a treatment or vaccine for COVID-19 would be available.
“The Federal Reserve is wrong so often. I see the numbers also, and do MUCH better than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021. We will also soon have a Vaccine & Therapeutics/Cure. That’s my opinion. WATCH!” Trump tweeted.
The attack was Trump’s first rebuke of the Fed since March, when the central bank slashed its baseline interest rate range to near zero percent and began purchasing trillions in bonds to keep credit flowing through the economy as the pandemic took hold. Trump even praised the Fed chief in May, calling him “most improved player.”
Before the coronavirus crisis, Trump frequently criticized the politically independent central bank, and Powell, for market slumps. He also would urge the Fed to push stocks beyond the already record highs achieved during his administration.
The Fed announced Wednesday it would maintain interest rates at near zero-levels and expected to keep them there until at least 2022. That same day, Powell said that while the May jobs report showed a surprising addition of 2.5 million jobs, the U.S. still faced significant economic threats.
“You could see significant job growth in coming months as people return to their jobs, but you’re still going to face, probably, an extended period where it will be difficult for many people to find work,” Powell said.
His warning and the emergence of several new COVID-19 hot spots across the U.S. were among several forces behind Wall Street’s steep Thursday sell-off. More than 1.5 million Americans also filed new claims for unemployment benefits during the first week of June, according to Labor Department data released Thursday morning.
The Dow Jones Industrial Average plunged more than 1,000 points in early trading, falling nearly 4 percent by the time Trump tweeted his gripes with the Fed just after 11 a.m. The tech-heavy Nasdaq composite had fallen 2.3 percent and the broader S&P 500 was down 3.2 percent.