U.S. President Donald Trump offered praise over an interest-rate cut by Australia early Tuesday, and repeated his call for the Federal Reserve to cut interest rates.
He said as other countries are cutting interest rates, the Fed “has us paying higher rates than many others, when we should be paying less,” which makes it hard for exporters and puts the U.S. at a disadvantage. “Should ease and cut rate big. Jerome Powell has called it wrong from day one.”
In a press conference on Saturday, Trump repeated hopes that the Fed would be the “leader, not a follow” when it comes to looser monetary policy among industrialized nations. The Reserve Bank of Australia cut its benchmark cash rate by 25 basis points to a new record low of 0.50% on Tuesday, and Governor Philip Lowe signaled more action could be taken.
“The global outbreak of the coronavirus is expected to delay progress in Australia toward full employment and the inflation target…The Board is prepared to ease monetary policy further to support the Australian economy,” he said in a statement.
Group of Seven finance ministers and central bankers, led by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, are expected to lead a call on Tuesday to discuss risks from the virus and potential response. But Reuters reported that a draft of that statement lacks details on any policy response.
Powell said last Friday that the central bank was “closely monitoring” the coronavirus epidemic and the impact it had on growth. The Organization for Economic Cooperation and Development said Monday that the disease could shave between 0.5% and 1.5% off global growth this year, and urged governments to act “swiftly and forcefully” to cushion from that blow.