Rate-raising Fed biggest threat to USA growth, says Trump

28 October, 2018, 07:46 | Author: Kathy Ellis
  • Trump Says He ‘Maybe’ Regrets Picking Fed's Powell WSJ Reports

Trump told the Wall Street Journal on Tuesday that the Federal Reserve Bank was the "biggest risk" to the USA economy, and suggested that its Chairman, Jerome Powell, was going on an interest-rate-raising spree because it makes him "happy".

"Every time we do something great, he raises the interest rates", Mr Trump told the Journal.

President Donald Trump on Tuesday accused Federal Reserve Chairman Jerome Powell of getting joy out of raising interest rates in an interview with The Wall Street Journal published on Tuesday. Though critics have blamed Trump's comments for the sharp fall in USA stock markets, White House officials have dismissed them as a natural correction after long run of rising share prices.

Trump said it was "too early to tell, but maybe" he regrets nominating Powell last November to succeed Janet Yellen, who departed in February after leading the Fed for four years.

To avoid a resurgence of inflation and the overheating of an economy that is hyper-stimulated by the cuts in tax administration Trump, the monetary Committee of the Fed plans to raise once again this year a quarter of a percentage point (0.25 per cent) and probably three times next year.

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Tahith Chong, 18, was called into United's first team training in the Chilean's absence. "No, I'm happy here. I accepted his apologies. "It was the end of the story with me in the minute he apologised".

"U.S. monetary policy remains accommodative", Clarida said in remarks at the Peterson Institute for International Economics. The target range for the federal funds rate, now at 2 per cent to 2.25 per cent, is low by historical standards.

Since the end of 2015, after almost ten years of monetary policy rates near zero to support a recovery slow and poor, the Fed has gradually moved the rate of interest in the day-to-day, which are now between 2% and 2.25%. Yesterday, Atlanta Fed President Bostic said that the institution was comfortable with a fourth rate hike in light of strong economic data. Trump blamed the nation's central bank for the latest market turmoil, saying the "Fed has gone insane". "I don't know", Trump said. Volcker famously saved the US economy from double-digit inflation in the 1980s by jacking up rates, despite massive criticism. With regard to unemployment, the Fed expects next year to see it at 3.5-percent, the lowest it's been at any point since 1969.

"I'm not happy about that", he said at a press conference in NY. Hence, higher rates mean higher cost of borrowing for consumers and corporations, which, in turn, lead to lower profits and a weaker economy.

Combined those factors would allow the Fed to keep interest rates lower than otherwise without risk of inflation, key indicators of which "are not flashing red right now". The rate hikes are also created to give it room to provide support for the economy whenever the next downturn arrives.

Powell was previously appointed to the Fed's Board of Governors by former President Barack Obama in December 2011.

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