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Trump announces Powell as his Federal Reserve nominee in November 2017. Photo: Drew Angerer/Getty Images)

President Trump's latest tweets have continued a pattern of attacking the Federal Reserve and his handpicked chairman Jerome Powell for months using a mix of half-truths, mischaracterizations and hyperbolic fantasies, such as a claim that the stock market would be 10,000 points higher if not for the Fed.

Driving the news: On Wednesday morning, Trump said on Twitter that the Fed "cannot 'mentally' keep up with the competition - other countries. At the G-7 in France, all of the other Leaders were giddy about how low their Interest Costs have gone. Germany is actually “getting paid” to borrow money - ZERO INTEREST PLUS! No Clue Fed!"

Reality check: German government bonds yields and interest rates in Europe are much lower than those in the U.S., but that's because their economies are so weak. Germany's economy shrank in the second quarter, while the U.S. economy grew by 2%. The eurozone economy as a whole grew by 0.2%, about 1/10th the rate of the U.S.

Central banks raise interest rates to hold off inflation and prevent asset bubbles from forming. A major contributor to the 2008 global financial crisis was the bubble in the housing market that made its way through the banking system and burst.

  • Trump also has attacked China's central bank for too-low rates, even though the People's Bank of China holds interest rates about twice as high as the U.S.

Between the lines: The president's recent suggestion on Twitter that the Fed lower interest rates by 50-100 basis points "over a fairly short period of time" and add "some quantitative easing" demonstrates further lack of understanding.

  • Lowering interest rates that much in a short period of time would signal a massive panic by the Fed and send stocks, bonds and the dollar sharply lower, causing hundreds of billions in losses.
  • Quantitative easing is an extreme measure central banks take only in times of severe crisis to jumpstart the economy and forestall a potential recession.

The Fed's job is to reduce unemployment and keep inflation contained. Restarting quantitative easing or introducing European-style negative interest rate policies has the potential to do more harm than good.

Go deeper

47 mins ago - World

South Africa says it's being "punished" for detecting new COVID variant

South African Foreign Minister Naledi Pandor addresses the 76th Session of the U.N. General Assembly on September 22, 2021 in New York City. Photo: Eduardo Munoz - Pool/Getty Images)

South Africa said Saturday it's being "punished" for detecting the new Omicron coronavirus variant as more countries rush to enact travel bans and restrictions.

Driving the news: The U.S. imposed air travel restrictions from eight countries Friday in response to the Omicron variant. Countries in Europe and Asia have also implemented their own travel restrictions in response to Omicron.

Trump can't quit mainstream media

Bob Woodward and Robert Costa are interviewed by Chuck Todd on "Meet the Press" in September. Photo: William B. Plowman/NBC via Getty Images

Bob Woodward and Robert Costa issued a rebuttal on Friday to a statement by former President Donald Trump that misrepresented their reporting — and once again showed the 45th president's thin skin about mainstream media.

Driving the news: "Former President Trump said ... our book, 'Peril,' implied that he was planning to go to war with China," the statement begins. "[W]e report that Chairman of Joint Chiefs Mark Milley 'believed that Trump did not want a war' before or after the 2020 election."

NY declares state of emergency amid concerns over Omicron COVID variant

Governor Kathy Hochul makes an announcement about a new plan transforming Penn Station on Nov. 3, 2021. Photo: Lev Radin/Pacific Press/LightRocket via Getty Images

New York Gov. Kathy Hochul on Friday declared a state of emergency amid rising COVID-19 cases and the newly-identified Omicron variant of the virus.

Driving the news: The declaration enables the state to acquire supplies to fight a potential surge in cases, increase hospital capacity and combat potential staff shortages, NBC's local affiliate reports.