Economy

Trump rips Federal Reserve chair Jerome Powell for raising interest rates

Trump rips Federal Reserve chair Jerome Powell for raising interest rates”

The Federal Reserve should raise US interest rates further this year and probably next year as well, despite President Donald Trump's displeasure at tighter policy, Kansas City Federal Reserve Bank President Esther George said in interviews aired on Thursday.

Donald Trump has criticised the US Fed chief for raising interest rates.

"I'm not thrilled", the president, who himself appointed Powell to lead the central bank, told Reuters on Monday.

When Trump was asked if he believed in the Fed's independence, he refused to say yes, telling the reporter: "I believe in the Fed doing what's good for the country". "I'm not thrilled", Trump said in an interview with Reuters.

The Fed began its current round of interest-rate hikes under Fed Chair Janet Yellen in December 2015, and since December 2016 has lifted them every quarter.

American presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability.

Sure enough: "U.S. stocks dipped after Trump's comments to Reuters".

"We know higher interest rates cause adjustments in the economy".

Markets barely budged after the release of minutes from the Federal Reserve's policy meeting that ended August 1.Futures traders priced in a slightly higher chance that the Fed will increase rates two more times this year. -China meeting after the two countries slapped tit-for-tat tariffs worth billions of dollars on each other.

A Chinese central bank official said on Tuesday that China had taken note of the U.S. comments on the yuan, and said the two sides should communicate on the issue.

Shoprite's shares were higher by 3.05% after falling more than 4% on Tuesday on the back of its first annual earnings decline in 19 years.

The criticism comes after a private Republican fundraiser on Friday, during which Trump reportedly attacked Powell's interest-rate hikes.

"We do our work in a strictly nonpolitical way, based on detailed analysis, which we put on the record transparently, and we don't take political considerations into account", Powell said in the interview.

Kohn said he didn't think Powell or the Fed would change their course because of Trump's remarks.

After sliding to a two-year low of 15.70 last week as the Turkish crisis triggered a broad flight from emerging markets, the rand has regained some ground, advancing around 8% in the last seven days as the greenback's rally faltered.

"I doubt these comments move the needle for Powell and his colleagues, but it certainly sends a strong signal to those candidates interested in vying for one of the Fed Board's many open seats: favour easy money policy or find another job", LeBas said.

"Well, the Fed was set up to be independent from politics as much as you can be in Washington, from the whims of the moment, whether it's the president or whether it's the Congress", Shelby said.



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