Should The Fed Cut Rates to Zero?

Written by Staff Writer

Federal reserve bank of NYTrump says Fed 'boneheads' should cut interest rates to zero 'or less' -CNBC
"President Donald Trump on Wednesday continued his verbal assault on the Federal Reserve, which he blames for slowing the economy, tweeting that the central bank should cut interest rates to zero or even set negative interest rates. The president also called Fed officials 'boneheads' in the tweet. 'The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt.

INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term,' he said. A Fed spokesman declined comment on the latest Trump salvos. The president also made a new suggestion not seen in some of his past attacks on the Fed, saying that the country should refinance its debt load. The U.S. has $22.5 trillion in debt, $16.7 trillion of which is held by the public. That debt load has grown $2.6 trillion, or 13% under Trump, due in part to the 2017 tax cut that the president shepherded through Congress. Taxpayers have shelled out $538.6 billion in interest costs in the 2019 fiscal year, easily a record. The idea for 'refinancing' federal debt is without any modern precedent....The Fed is expected to approve another quarter-point rate cut at its meeting next week, following July's reduction that was the first such move in 11 years. Markets foresee one more reduction before the end of the year and another in early 2020."