Navarro Blasts Case for Fed Rate Hike to Defend Its Independence
(Bloomberg) -- White House trade adviser Peter Navarro echoed his boss’s criticism of the Federal Reserve on Monday, saying the central bank would be unjustified in raising interest rates just to show its independence from political pressure.
“We have zero inflation for all practical purposes, so on Wednesday the only argument I am hearing for the Fed to raise rates is that somehow they have to exert their independence from the White House,’’ Navarro told CNBC on Monday. “This is a bad argument. I think what the Fed should do is simply do what it says it’s going to do, which is look at the data.’’
Navarro, director of the Office of Trade and Manufacturing Policy, is known mainly for espousing a hawkish U.S. line toward trade imbalances with China.
President Donald Trump renewed his pressure on the central bank to halt the hikes in a tweet earlier Monday that cited a “a very strong dollar and virtually no inflation.” Investors widely expect the Fed will raise rates for the fourth time this year at the conclusion of its two-day meeting in Washington.
Trump’s criticism, which has been escalating for several months, ended a decades-long tradition of the White House avoiding public comment on monetary policy out of respect for Fed independence.
©2018 Bloomberg L.P.