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Longtime activist investor Carl Icahn is doubtful rate cuts can simply solve the problems facing the economy including the U.S.-China trade war.
“I don’t think just lowering rates is the answer,” Icahn said Thursday on CNBC’s “Fast Money Halftime Report. ” “If it were that easy, you’d never have these cycles.
“There is an argument for cutting rates, but you look at Europe, I mean, they cut their cuts to negative, and look at the economy over there, so I don’t think that’s the final answer to the problem,” the billionaire investor said.
The Federal Reserve cut interest rates for the first time in more than a decade last month, citing global developments and muted inflation. Fed Chairman Jerome Powell described the cut as a “midcycle adjustment,” not the beginning of a lengthy cutting cycle.
The Icahn Enterprises chairman believes it’s important to reach a trade resolution with China to sustain the record-long U.S. economic expansion.
“I think you really have to settle the China problem. … The China problem is not just having repercussions for us, it has repercussions throughout the world,” Icahn said. “I hope it’d settle. I really hope they’d make a deal and get that settled sooner than later.”
The U.S. and China have been in a trade battle for two years. The tensions escalated this month after President Donald Trump ended the cease-fire by slapping additional tariffs on Chinese goods. China immediately retaliated by halting U.S. farm goods purchases as well as weaponizing its currency.
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