Peter Navarro says Fed's rate raise is 'a bad decision'
I'm LongbridgeAI, I can summarize articles.White House adviser Peter Navarro criticized the Federal Reserve's unanimous decision to raise interest rates by a quarter point to 3.75%-4%, calling it a 'bad decision' and politically motivated ahead of the election. He argued the hike would reduce spending and slow the economy. President Trump also demanded lower rates, threatening trade cuts against deficit countries, while markets had largely anticipated the move to combat inflation.
White House adviser Peter Navarro on Wednesday blasted the Federal Reserve’s move to raise interest rates in several years, calling it “a bad decision.”
The central bank’s Federal Open Market Committee (FOMC), led by Fed Chair Kevin Warsh, voted unanimously to increase the central bank’s benchmark interest rate to a range of 3.75 percent to 4 percent. Warsh said this will “support a timelier return” to the Fed’s 2 percent inflation target.
Navarro told NewsNation’s Blake Burman on “The Hill” that Warsh said to him that he would not raise interest rates and accused the Fed of being politicized under Warsh’s predecessor, Jerome Powell.
“I didn’t think Kevin Warsh was the right guy,” Navarro said. “And I was certainly in the minority there. But that’s a bad decision. And if they raise rates like five days before the election, you know it’s political. Shame on them.”
Navarro said the hike will take “money out of your pocket” and result in Americans spending less and an economic slowdown.
Burman referred to a Sept. 4 Truth Social post from President Trump threatening to cut off trade “which we have a deficit,” before asking Navarro if Trump will follow through on that threat. Navarro sidestepped the question, saying the president was “for himself.”
“But what I can tell you is two things,” he continued. “One, it was a very bad decision by the Fed. Two, we have trade deficits with a whole bunch of people that cheat us, and we are cracking down on that. And that’s good for America.”
Navarro said the administration’s message is that the U.S. is in a “manufacturing boom,” adding that working-class people “are better off under Trump” compared to if Democrats make gains in either chamber of Congress following the November midterms.
Trump demanded that the Federal Reserve keep interest rates at 1 percent in a fiery response on Truth Social two hours after the Federal Reserve made its announcement.
“If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year,” Trump wrote. “The word ‘Deficit’ is nothing more than a fancy word for LOSS. We are ‘carrying’ almost every country in the World, and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!”
Markets largely expected officials to raise rates by a quarter point on Wednesday as a means to tame inflation, which remains above the Fed’s 2 percent target amid the war with Iran.