President Trump says he's ‘not happy' with interest rate hikes

Lloyd Doyle
July 20, 2018

President Donald Trump said he was ready to impose tariffs on all $500 billion (£381.8 billion) of imported goods from China, remarks that sent the USA stock market and dollar retreating and threatened to escalate a trade clash with the Asian giant.

In a taped interview with the business channel CNBC, Trump said "I'm willing to go to 500", referring roughly to the US$505.5 billion in goods imported previous year from China.

"I don't like all of this work that we're putting into the economy and then I see rates going up", Trump said. "We have been ripped off by China for a long time", he said.

"Equities sank sharply in the wake of Trump saying is he ready to slap tariffs on all the goods the U.S. imports from China, which total over $500bn".

China imports far less from the USA, buying about US$130 billion in American goods a year ago, so it doesn't have as much to leverage with tariffs, but it could use other measures to hit trade such as tightening regulatory oversight.

It's always been speculated that the taboo of commenting on US monetary policy could change under Trump, who slammed the Fed during his election campaign and has demonstrated repeatedly his willingness to flout the conventions and sensibilities of establishment Washington.

"I'm not thrilled", Mr Trump told the network in an interview excerpt aired on Thursday. "I couldn't care less what they say, because my views haven't changed".

"You look at the euro, you look at what's going on with the European Union, they're not doing what we're doing and we already have somewhat of a disadvantage, although I'm turning that into an advantage", Trump said.

He added, "No one in the administration has said anything to me that really gives me concern on this front".

Mr Trump said increased rates had resulted in a stronger dollar which put the United States at a disadvantage compared with places where central banks are holding interest rates steady. He did not give CNBC any comment on Trump's interview.

The Fed raised interest rates twice this year and Mr. Powell said two more increases are likely before the end of 2018.

Trump nominated Powell as Fed chairman previous year to replace Janet Yellen.

Bloomberg's headline says Trump "trespass [ed] on Fed's independence". The Fed has been independent from political interference during its existence, so comments direct as these will undoubtedly stir debate. The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and to prevent the economy from overheating. Low interest rates reduce the costs of borrowing money and fuel economic expansion, but risk spurring rampant inflation and financial market bubbles.

Interest rate hikes can suppress investment and the unemployment rate, two metrics Trump and Republicans touted frequently throughout his presidency.

Other reports by Iphone Fresh

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