Published: Sun, October 21, 2018
Money | By Bruce West

Trump escalates his attacks on Fed: 'My biggest threat'

Trump escalates his attacks on Fed: 'My biggest threat'

Every Federal Reserve policymaker backed raising interest rates last month in a meeting where they also generally agreed borrowing costs were set to rise further, according to minutes from the meeting released on Wednesday.

His comments come as other Fed figures opine on an economy that has become the subject of political interest as President Donald Trump continues to bash the Fed's rate hikes ahead of the mid-term election.

On the other hand, while risks were 'roughly balanced, ' some Fed members said instability in emerging economies - many of which are heavily indebted and vulnerable when U.S. rates rise - could 'spread more broadly through the global economy and financial markets'.

Former National Economic Council director Gary Cohn said on Thursday he doesn't think President Donald Trump should comment on independent agencies, after the President's repeated comments bashing the Federal Reserve.

The Fed raised interest rates last month for the third time this year and said it planned four more increases by the end of 2019 and another in 2020. Bullard, who is not a voting member of the FOMC, said that despite Trump's public criticism of the Fed, he "like [s] the president's appointments" to the central bank's board. The Fed has always been seen as needing to remain free of political pressure to properly manage rates, and presidents have generally respected that independence, especially publicly.

The U.S. central bank has settled into a gradual policy of raising its policy interest rate that began slowly in late 2015, and is expected to raise rates again in December and next year.

"The fact that they refrained from labeling China a currency manipulator is a positive development, especially from the point of view of emerging market currencies", said Attrill.

In Tuesday's interview, though, Trump said of his other nominees for the Fed, "I put a couple of other people there I'm not so happy with too but for the most part I'm very happy with people". The president did not specify which Fed officials displeased him, but the Senate has so far only two of his additions to the bank: Vice Chairman Richard Clarida and Vice Chairman for Supervision Randal Quarles. "The Fed is going loco and there's no reason for them to do it and I'm not happy about it".

However, the same Fed minutes also noted global growth concerns and worries the USA dollar could sink lower, explaining the somewhat hawkish view on U.S. markets overnight.

"Our economy is strong", Powell said at a press conference following the September meeting.

When asked if he thought the President should be weighing in on the agencies, he replied: "I don't think he should be making comments on any federal agency".

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