Five things to know about Trump's war (of words) on the Fed

Five things to know about Trump's war (of words) on the Fed

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". "I don't know. I'm just saying that I'm not happy with the Fed because Obama has had zero rates", replied Mr. Trump that since July lectured vociferously the central bank, breaking with the tradition of respecting the independence of the monetary institution.

"Every time we do something great, he raises the interest rates.he nearly looks like he's happy raising interest rates", Trump was reported as telling the Wall Street Journal.

"President Donald Trump's recent public criticism of Fed Chair Jerome Powell is a clever attempt to pre-emptively blame the Fed and its interest rate hikes for any future downturn in the United States economy".

USA presidents usually remain silent on such issues in respect toward the Fed's independence. To that he simply said "too early to tell, but maybe". He had also commented that keeping the interest rates artificially low is affecting the health of the economy.

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The target range for the federal funds rate, now at 2 percent to 2.25 percent, is nevertheless still 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%. Bostic also said that falling stock prices, ongoing trade tensions and other "headwinds" were unlikely to change the Fed's perspective.

If that is the case, then the current half-century low unemployment rate of 3.7 percent would give no inherent reason to push interest rates past a "neutral" level.

Trump made his first public comments signaling dismay about his pick on July 19, when he told CNBC he was "not thrilled" about the Fed's rate increases.

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"A business that's doing badly always likes to blame Trump and the tariffs because it's a good excuse for some incompetent guy that's making $25 million a year", Trump said.

While his remarks were a bit more tempered than those of his colleagues earlier this week, Clarida said he sees "further gradual adjustment" in the Fed's benchmark funds rate as likely.

The Fed raises rates by a quarter point.

"We are doing great as a country", Trump says at a press conference in NY. "Trend growth in the economy may well be faster and the structural rate of unemployment lower than I would have thought several years ago". His confirmation helped fill the ranks on the Fed's Board of Governors, which was operating with three out of potential seven members.

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