Trump slams Fed's rate policy despite strong economy

Lester Mason
July 22, 2018

Rather, he may be prepared to wait as long as he feels it necessary to force other countries to adopt trade rules more favorable to the United States. Tightening now hurts all that we have done.

"The US should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals", Trump said on Twitter.

But most economists credit the Fed with engineering the economic recovery that began in 2010, and is now the second longest US economic expansion on record, by keeping interest rates at historically low levels and buying back US Treasury debt to inject liquidity into the market.

The move came just hours after President Donald Trump threatened to slap tariffs on $500billion worth of Chinese goods.

The president has already imposed tariffs on $34 billion in Chinese goods, and Beijing has retaliated with tariffs on an equal amount of American exports.

"I'm ready to go 500", the Republican leader told the U.S. network CNBC, referring to the US$505.5 billion (RM2.055 trillion) in Chinese imports accepted into the United States in 2017.

CNBC said, "The Fed's independence from political interference has been a hallmark of its existence, so Trump's remarks have little precedent".

The president is limited in how much direct pressure he can put on the Fed chief.

Mr Trump's comments will make life hard for both the Treasury and the Fed, said Tony Fratto, former White House deputy press secretary under George W Bush and founder of Hamilton Place Strategies in Washington.

Mr Trump's dismissal of economic-policy tenets shifts attention during a week when he's facing growing pressure over his relationship with Russian President Vladimir Putin and his lukewarm support for the finding by U.S. intelligence agencies that Russia meddled in the 2016 election.

It's not that unusual for politicians to blame the Fed when things go wrong with the economy.

The Fed hiked interest rates twice this year, and plans to raise them two more times by the end of 2018.

"I am not happy about it", the president said. More than 70 per cent of Republican and Republican-leaning U.S. adults believe increased tariffs between the United States and its trading partners will be good for the country, according to a Pew Research Centre survey.

The comments, plus Trump's criticism of Federal Reserve interest rate hikes, had sent the dollar tumbling against a basket of currencies.

U.S. central bankers project two more interest rate increases this year and another three in 2019.

But, she said, "I'm not filling myself with expectations or predictions" for Juncker's trip. They simply mean that Americans trade more money for Chinese goods than vice versa, largely because Chinese goods are cheaper, which in turn affords Americans a higher standard of living.

The Wall Street Journal noted that Mr Trump's comments had an immediate impact on global markets, sending the stocks lower.

The White House on Thursday attempted to ensure markets that the Fed maintains its independence after the CNBC interview was aired.

Trump nominated current Fed Chair Powell, who had served as a governor on the board of the Fed, to serve at its helm after Janet Yellen's retirement in February.

The People's Bank of China set the Chinese currency's central parity rate to 0.9 percent weaker against the dollar on Friday.

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

Other reports by Iphone Fresh

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