'Not thrilled' with interest rate hikes

Lloyd Doyle
July 20, 2018

President Donald Trump on Thursday said he's "not thrilled" the USA central bank under Fed Chairman Jerome Powell is continuing to raise interest rates, suggesting the Fed may be undercutting his efforts to grow the economy.

Mr Trump said that he was "not happy" with the Fed's plans for further rate rises, which would put the USA at a "disadvantage" to other economies with looser monetary policy.

This was not the first time Trump departed from a long-standing practice by U.S. presidents of respecting the Federal Reserve's independence by refraining from commenting on interest rates or the value of the United States dollar, a custom he dismissed.

The Washington Post says Trump broke with "longstanding practice" by criticizing the Fed, which presidents typically avoid doing "out of respect for the independence of the institution, and to avoid any hint of political influence over the nation's monetary supply".

"They're not doing what we're doing", Trump remarked, "and we already have somewhat of a disadvantage, although I'm turning that into an advantage". There will be many "who see that as the Fed yielding to a combative president", Conti-Brown said.

The White House defended his remarks, saying, "Of course the President respects the independence of the Fed".

The White House also attempted to assuage fears of the president pressuring the Fed immediately after Trump's comments were released.

"I'm not thrilled, because we go up and every time you go up they want to raise rates again", Trump told CNBC.

"I'm not happy about it". Eventually Burns relented, aiding Nixon but also helping to feed runaway inflation that dogged the USA economy for almost a decade.

Trump said he didn't approve of the hikes, even though he said he "put a very good man in" at the Fed in Powell. Trump was a critic of Fed policy under Yellen's predecessor at the Fed, Ben Bernanke, protesting his moves to keep interest rates low and prop up the economy after the financial crisis just before Obama took office. "But at the same time I'm letting them do what they feel is best", he said.

Overall, however, markets weren't too rattled when a mid-afternoon headline from CNBC indicated Trump is not happy about the Federal Reserve's decision to raise interest rates.

In his remarks to CNBC, Trump called Powell "a very good man".

Trump has taken credit for robust U.S. economic performance since his election and championed December's sweeping tax cuts.

Trump regularly claims that his policies, especially tax cuts enacted by Congress last December, have created jobs and economic growth.

A number of factors, including inflation and higher interest rates, could soon counteract the fiscal stimulus, however, and economists say the risk of recession in the coming years is growing.

If things turn sour, however, Trump's comments suggest that could change.

'So somebody would say, 'Oh, maybe you shouldn't say that as president.' I couldn't care less what they say because my views haven't changed, ' he told CNBC.

Other reports by Iphone Fresh

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