Hedge Fund Investor to Newsmax: Fed Must Cut Rates So Economy Doesn't 'Choke'

Hedge fund manager and investor Mitchell Feierstein told Newsmax on Thursday that the "partisan" Federal Reserve needs to cut interest rates so that the economy doesn't "choke."

Feierstein said on "Wake Up America" that he thinks the Fed is basing its decisions on something other than "the dual mandate of full employment and price stability," and called it "a huge problem for the economy."

"The European Central Bank has cut interest rates eight times and we've cut interest rates three times," he said. "When they cut in September 50 basis points, it was purely political to try to help the Democratic Party.

"Now, the unemployment figures were revised downward, so we had plenty of room to cut at this last meeting. I expect them to have three cuts. They're probably going to have to have an emergency cut this year, because [Federal Reserve Chair Jerome] Powell and his staff are way behind the curve, I think."

President Donald Trump took to Truth Social Wednesday to hammer Powell over his failure to lower interest rates.

Trump shared an opinion piece from a federal regulator calling on the Federal Reserve chair to cut interest rates or resign.

"Too Late—Powell is the WORST," Trump wrote. "A real dummy, who's costing America $Billions!"

Feierstein said the Swiss National Bank cut its interest rates to zero Thursday and noted that it's "had largely negative interest rates."

"The problems that we're encountering right now, we've seen oil from May 1 surge a total of 34%," he said. "So, we're up to over $76 and people are saying, Well, that's going to be transitory and that's going to impact and the tariffs. That's what Powell is using as an excuse. However, we have to refinance a gigantic amount of money and it's going to be between 200 and 300 basis points higher than when they did it below 1%. So, that's why we need lower interest rates. Otherwise, our economy is going to choke."

Feierstein, author of "Planet Ponzi," also said the problems the U.S. economy is facing are of the Fed's making.

"The Federal Reserve policy for over a decade, they were too slack for far too long and they caused all these problems," Feierstein said. "These are legacy problems they've dumped in this administration's lap that we've got to deal with and create growth. The rest of the world, Germany is in a recession for the past two years. The other economies in Europe are in a recession. I think Germany can go into a depression and the EU is one of our largest trading partners. So, we need to stimulate growth here.

"I do not believe that the tariffs will be inflationary, because it's a statistically insignificant sum of money that we're talking about with tariffs. That's an excuse by the Fed to cover up from their shortcomings."

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