Former President Richard Nixon was criticized for bullying the Fed into keeping interest rates low, pressure that led to debilitating inflation. He told CNBC's Joe Kernen, "Because we go up and every time you go up they want to raise rates again". China accused American officials of making false accusations Thursday as it fired back against a claim President Xi Jinping is blocking talks with the USA over the trade war between both nations. But at the same time I'm letting them do what they feel is best. Stocks, however, showed little reaction and remain slightly lower on the session.
The US also wants China to stop practices that allegedly encourage transfer of intellectual property - design and product ideas - to Chinese companies, such as requirements that foreign firms share ownership with local partners to access the Chinese market.
He likewise also took aim at the dollar, saying a higher value "puts us at a disadvantage" and adding that the Chinese yuan "has been dropping like a rock".
Trump said shortly after his first meeting with Chinese President Xi Jinping in 2017 that the country had stopped manipulating its currency because of his election.
Indeed, he has never been reticent on the subject.
Despite this, Trump said that the Fed should keep rates low so the USA economy could make up lost ground to China. In particular, the Fed's most recent rate hikes could dilute some of the benefit of the tax cuts Trump signed into law previous year. Past presidents have also steered clear of commenting on USA monetary policy out of respect for the Fed's independence so the path of borrowing costs doesn't move with the whims of politicians.
The Fed has been slowly raising interest rates since December 2015 in an effort to avoid overheating the USA economy. The benchmark, 10-year yield dipped temporarily to 2.83 percent after the interview, but rebounded back to 2.84 percent.
The Fed began raising interest rates from emergency levels in 2015, under Powell's predecessor Janet Yellen. And at others, the central bank was complicit in hewing to the administration's political preferences. "Debt coming due & we are raising rates - Really?" he tweeted. To do so, Nixon swapped out Fed Chairman William McChesney Martin with his pick, Arthur Burns.
It wasn't the first time in history the Fed has faced pressure from a U.S. president. Axios reports on Friday that "chances of a longer, wider, more damaging trade war with China are rising", with one possible scenario including China goading Trump into a trade war. Erdogan has clashed with his central bank, asserting his notion that higher interest rates feed inflation rather than restraining price rises.