China and the United States may now be on their way to striking some sort of a deal to resolve their trade spat, but their relationship has suffered after their negotiations hit a roadblock back in May. When things don't go well, U.S. President Donald Trump's approach is to blame someone, and Federal Reserve chairman Jerome Powell suddenly became the target of his attacks.
On May 14, Trump tweeted: "China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing. If the Federal Reserve ever did a 'match,' it would be game over, we win!" Elsewhere, Trump employed even more abusive language, claiming "I think the Fed has gone crazy" in response to the bank's positive stance on interest rate hikes through the end of last year, and its scheduling of two hikes for 2019.
Trump lambasted what he called the rate hike-obsessed Fed for strengthening the dollar, thereby, in his opinion, boosting Chinese imports and damaging the U.S. economy. Last fall, the president vented his dissatisfaction with the Federal Reserve chief by saying that "maybe" he regretted appointing Powell to lead the Fed, and noted that the Obama administration (unlike his own) had operated with "zero interest" rates. In other words, Trump suggested that the Fed had curried favor with his predecessor, Barack Obama, by keeping interest rates flat, but was now punishing his own administration by heaping on the rate hikes.