BREAKING NEWS : FBI seeking woman who may have info about child sexual assault Full Story

Trump escalates his war with the Fed

President Donald Trump has escalated his highly unusual attack on the Federal Reserve.He tweeted early Friday ...

Posted: Jul 20, 2018 8:02 PM
Updated: Jul 20, 2018 8:02 PM

President Donald Trump has escalated his highly unusual attack on the Federal Reserve.

He tweeted early Friday that higher interest rates are taking away America's competitive edge with China. On Thursday, he complained that higher rates were undoing his administration's efforts to help the economy.

The dollar fell on Trump's tweets.

The Federal Reserve was constructed early in the 20th century to be an independent financial institution, free from the whims of politics. The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and to prevent the economy from overheating.

Higher rates strengthen the dollar against the world's currencies, which makes the United States a more expensive place to invest.

Trump said that raising American interest rates makes China a more attractive to place to invest, because China artificially devalues its currency. When US rates go up, American businesses' dollars go further outside the United States - particularly in China, where the yuan is cheap.

Ironically, the Trump administration's trade war with China has helped devalue the yuan, which has fallen more than 8% over the past three months. China's slowing economy has pushed the yuan lower, too.

The yuan fell sharply against the dollar on Thursday and Friday after China's central bank indicated that it was willing to accept a weaker currency. The People's Bank of China does not let the yuan float freely like the dollar. Instead, China sets a daily trading range for the yuan - an action that Trump and other China critics have described as currency manipulation.

A weak yuan could help China's economy cope with American tariffs, because Chinese products would be cheaper for buyers who pay in dollars.

In an interview with CNBC on Friday, Trump reiterated that he is willing to impose tariffs on all $506 billion worth of goods that China exports to the United States.

The United States is preparing to impose tariffs on another $16 billion of Chinese exports on top of the $34 billion already subject to American import taxes.

Meanwhile, other currencies have lost ground to the dollar this year. The European economy has lagged the United States', and the European Central Bank has only just begun to tighten its monetary policy.

Having it both ways

Trump has spoken out about the dollar and interest rates before. His comments are not only inconsistent with precedent, they are also inconsistent, period.

He has supported a strong dollar in the past.

"The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar," Trump said in a January 25 interview with CNBC at the World Economic Forum in Davos, Switzerland.

He also previously supported higher interest rates. He criticized former Fed Chair Janet Yellen, saying she should be "ashamed of herself" for keeping interest rates so low.

"The ones who did it right - they saved their money [and] they cut down on their mortgages ... and now they're practically getting zero interest on the money. Those people have really been, you could almost say discriminated against," he said in a September 12, 2016, interview with CNBC.

This is why presidents are not supposed to weigh in on Fed policy. What's politically expedient at the time may not be good for the American economy in the long run.

The Fed had no comment. Chairman Jerome Powell has played down concerns about Trump's politicizing the Fed.

"We have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns," he said in a radio interview last week with "Marketplace."

St. Louis Fed President James Bullard told reporters Friday that Trump's comments would not influence the central bank's decisions.

"Lots of politicians talk about Fed policy. The president does not have to stay out [of the debate]," he said. "It doesn't really change what the committee faces."

- CNNMoney's Donna Borak contributed to this report.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 614946

Reported Deaths: 9807
CountyCasesDeaths
Marion849231342
Lake45784693
Allen33103560
Hamilton29752316
St. Joseph27572383
Elkhart24496346
Vanderburgh19679255
Tippecanoe18150144
Johnson15234296
Porter14970172
Hendricks14550253
Madison11071223
Clark10852145
Vigo10819185
Monroe9496115
Delaware9193136
LaPorte9173164
Howard8325148
Kosciusko811485
Warrick683399
Hancock6783106
Bartholomew6659100
Floyd6522113
Wayne6194164
Grant6050118
Dubois559081
Boone557968
Morgan551996
Henry512365
Marshall507884
Dearborn488745
Cass487864
Noble476159
Jackson428747
Shelby423381
Lawrence395180
Clinton375845
Gibson375560
Harrison354046
DeKalb351365
Montgomery349754
Knox337839
Miami325244
Steuben315846
Whitley313126
Wabash306951
Adams303636
Ripley301646
Putnam299152
Huntington295760
Jasper293035
White275943
Daviess271776
Jefferson267738
Decatur249983
Fayette249949
Greene242763
Posey241828
Wells237551
LaGrange230363
Scott227939
Clay225032
Randolph215848
Jennings200937
Spencer193622
Sullivan193633
Washington189023
Fountain185227
Starke177044
Jay168723
Owen168338
Fulton165430
Orange161035
Carroll160616
Rush156418
Perry156129
Vermillion150034
Franklin149933
Tipton134433
Parke13098
Pike118826
Blackford112023
Pulaski97937
Newton92621
Brown88835
Benton87110
Crawford8099
Martin75013
Warren6867
Switzerland6695
Union6297
Ohio4967
Unassigned0375

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 872918

Reported Deaths: 10856
CountyCasesDeaths
Franklin102616707
Cuyahoga868931154
Hamilton65148455
Montgomery43662420
Summit35411766
Lucas31794634
Butler31451232
Stark26247445
Warren19939144
Lorain19378229
Mahoning17561339
Lake16350161
Clermont16235113
Delaware1463881
Licking13453142
Fairfield1301782
Trumbull12980317
Greene12226144
Medina11798169
Clark11094266
Wood10507158
Allen10031128
Portage9514111
Richland9275134
Miami927273
Marion7512113
Tuscarawas7455186
Columbiana7433124
Pickaway735250
Muskingum714042
Wayne7140172
Erie6253130
Ross5589100
Hancock556292
Scioto545365
Geauga518955
Darke474395
Lawrence464658
Union459130
Ashtabula457973
Sandusky440462
Huron435541
Mercer435590
Seneca435366
Auglaize425166
Belmont423948
Jefferson423969
Shelby422923
Washington396340
Athens38619
Putnam379276
Madison359930
Knox358423
Ashland349638
Fulton341744
Defiance336188
Crawford327274
Preble323637
Brown318821
Logan314835
Ottawa297443
Clinton293944
Highland282219
Williams282267
Jackson266145
Guernsey259326
Champaign254628
Fayette241030
Morrow23594
Perry235518
Holmes227274
Henry222954
Hardin217033
Coshocton208023
Van Wert204445
Gallia200126
Wyandot198151
Pike180918
Adams179815
Hocking174024
Carroll158216
Paulding145521
Noble121040
Meigs110324
Monroe103433
Harrison89821
Morgan84531
Vinton71714
Unassigned00
Fort Wayne
Cloudy
24° wxIcon
Hi: 27° Lo: 21°
Feels Like: 14°
Angola
Partly Cloudy
23° wxIcon
Hi: 24° Lo: 17°
Feels Like: 13°
Huntington
Cloudy
24° wxIcon
Hi: 26° Lo: 21°
Feels Like: 24°
Fort Wayne
Cloudy
24° wxIcon
Hi: 27° Lo: 23°
Feels Like: 14°
Lima
Cloudy
26° wxIcon
Hi: 27° Lo: 23°
Feels Like: 16°
More Clouds than Sun Wednesday
WFFT Radar
WFFT Temperatures
WFFT National

Community Events