Published: Fri, October 12, 2018
Markets | By Otis Pena

Trump says Fed ‘making a big mistake’ by being too aggressive

Trump says Fed ‘making a big mistake’ by being too aggressive

President Donald Trump renewed his attacks on the USA central bank on Thursday, saying it was "out of control" in raising interest rates but saying he had no plans to dismiss Federal Reserve Chairman Jerome Powell.

"Actually, it's a correction that we've been waiting for, for a long time", Trump said regarding the stock market.

Even chief Trump economic adviser Larry Kudlow, qualifying the president's opinion of Fed chair Jerome Powell's Fed, said he thought the central bank was "on target", and that its ability to raise rates was a sign of "economic health, that is something to be welcomed and not feared".

"I find myself in general agreement with Trump on his criticism of the Fed, which is that raising interest rates now doesn't seem necessary", Moore said. Indeed depressed long-term rates had led some Fed officials to worry that short-term rates might rise above them and cause the sort of bond yield "inversion" that precedes recession. He has repeatedly criticized the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating.

"It's had a big impact", Trump said in a Fox News interview.

Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.

"Our course is clear: Resolutely conduct policy consistent with the FOMC's symmetric 2 percent inflation objective, and stand ready to act with authority if expectations drift materially up or down", Powell said last week, referring to the policy-making Federal Open Market Committee.

Trump indicated he had not spoken with Powell. "But I really disagree with what the fed is doing. OK?"

Global fleet of F-35 fighter jets grounded after US crash
Britain, however, said the measure did not affect all of its F-35s, and that some flying missions had been "paused", not grounded. All three services have stopped flying the F-35 while fuel tubes in the aircraft are inspected and replaced if necessary.

The Fed traditionally remains outside the purview of the President, though Trump has at moments blurred the lines by commenting on Fed policy.

By historic standards, interest rates remain low.

The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the USA central bank. It is also expected to raise rates again by the end of the year.

In a phone-in interview with Fox News, Trump said USA tariffs on Chinese goods are having a "big impact" and that the Chinese have lived too well for too long.

During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the US economy was strong.

"The US tech bubble may take a while to burst and we are facing many external uncertainties - trade wars, risks in emerging markets currencies and oil price".

The central bank "is too tight", he added.

Like this: