Sunday, 05 April 2020 | 15:06 WIB

Trump Asks The Fed to Lower Interest Rates

United States President Donald Trump (special)

WASHINGTON DC, NETRALNEWS.COM -- United States (US) President Donald Trump said that the Federal Reserve (The Fed) must lower interest rates and pursue a policy of"quantitative easing to improve the economy of the US.

"I personally think the Fed has to cut interest rates. I think they really slowed us down. There is no inflation," Trump told reporters when he left the White House to California on Friday (04/04/2019).

The president also advised the central bank to pursue quantitative easing, a strategy used after a financial crisis a decade ago, which involved buying trillions of government-backed bonds and mortgages.

Quoted from Antara, Trump has repeatedly criticized the Fed's rate hike last year, and has reportedly even discussed the sacking of Fed Chair Jerome Powell last month. The Fed approved four interest rate increases in 2018, continuing steps towards normalizing policies that began in 2015.

In March, the Fed kept interest rates unchanged after ending a two-day policy meeting, and once again promised to be patient with future interest rate increases. The Fed also said it would end runoff or reduction in its balance sheet at the end of September.

The Fed began to gradually reduce its mortgage portfolio and bond-backed securities in October 2017 by allowing securities to mature without reinvesting the results, called "quantitative tightening". The Fed has cut its balance sheet from its highest position of 4.5 trillion dollars to 4.1 trillion at present.

According to data from the US Department of Commerce, real gross domestic product increased 2.9 percent in 2018, slightly below the Trump administration's 3.0 percent annual growth target.

In the latest economic projections released in March, the Fed cut its forecast for US economic growth in 2019 and 2020, estimating growth rates of 2.1 percent and 1.9 percent respectively.