Trump slams Fed for shunning negative interest rates

In a speech given to the Economic Club of New York on Tuesday, Donald Trump argued that the Federal Reserve was hurting the economy by not cutting rates into negative territory like other central banks.“We are actively competing with nations who openly cut interest rates, so now many actually getting paid when they pay off their loan, known as negative interest,” stated Donald Trump. “Give me some of that money. I want some of that money. Our Federal Reserve doesn’t let us do it… It puts us at a competitive disadvantage to other countries.”

Why it matters:

• Donald Trump continues to criticize the Federal Reserve for not cutting interest rates enough, often blaming it for any economic woes experienced under his administration. On October 30, for the third time this year, the Fed cut its target rate range, this time to 1.50% - 1.75%, citing uncertainty from global trade and weaker global growth.
• Although not an immediate threat, negative interest rates in the United States could mark a major turning point in how the global populace thinks about wealth preservation. As the world continues along its path to a cashless society, citizens may find themselves trapped putting money into negative yielding bank accounts. Cryptocurrencies could offer an exit from negative yielding monetary systems and act as a hedge against a cashless society.

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