Trump says 'my biggest threat is the Fed'

Screenshot  FOX Business

Screenshot FOX Business

President Donald Trump is criticizing the Federal Reserve for raising interest rates too quickly.

The discussion, revealed Wednesday in minutes of the Fed's September 25-26 policy meeting, showed that a few participants thought the Fed's key rate would need to "become modestly restrictive for a time" to prevent inflation from climbing too high.

Others said that, to avoid creating asset bubbles or having inflation run above the Fed's two-percent target for too long, the central bank would have to raise rates "above their assessments of its longer-run level.' Still, a 'couple" of participants said they would oppose this unless clear danger signs - an overheating economy and mounting inflation - were to arise.

Trump has said he is not trying to oust Powell, who he appointed to replace former Chair Janet Yellen.

"Precisely because of the uncertainty around the course inputs, the right strategy was to set a course based on your knowledge of the destination, winds, and performance of your plane; communicate that course clearly to air traffic control so everyone knew what you were doing; and then stick to that course steadily even as the course needle might waver from side to side across your instrument", he said.

Trump made his comments in an interview with Fox Business Network's Trish Regan.

"The fed raising interest rates too quickly, she's too independent", - he said and noted that he does not like what makes the Chairman of the regulator Powell, but to intervene in the policy of the fed, the President can not. The continued "gradual" rate increases are regarded as insurance against that possibility.

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Under Powell, the Fed has been gradually raising rates as the economy has strengthened as a way to prevent a run-up in inflation. The central bank has been increasing interest rates for almost three years.

Trump's comments Tuesday came on a day when the stock market staged an enormous comeback - its biggest one-day rally in six months - on the strength of healthy earnings from financial and health care companies and encouraging reports on the economy.

United States markets continue to look edgy, as investors clung on for a white-knuckle ride, riding the Dow Jones Industrial Average up and down overnight.

President Donald Trump reignited his controversial criticism of the central bank Tuesday, calling the Federal Reserve his "biggest threat".

The Fed should "follow that course through the temporarily shifting and sometimes conflicting signs from the economy unless some strong and steady signal requires a firm but moderate correction", he said at the Economic Club of NY.

"The Fed is going loco and there's no reason for them to do it and I'm not happy about it", the president told Fox News in an interview last week. But as a sitting member of the Fed Board, Quarles is also a voting member of the Federal Open Market Committee.

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