Trump pressures U.S. Fed ahead of expected rate hikes

Trump pressures U.S. Fed ahead of expected rate hikes

WASHINGTON (Rahnuma): U.S. President Donald Trump on Monday criticized the Federal Reserve again for continuing to raise interest rates, saying it is “incredible” that the Fed is considering another interest rate hike given the current economic situation.

It is “incredible” that with “a very strong dollar” and “virtually no inflation,” and with the outside world “blowing up,” the Fed is even considering “yet another” interest rate hike, Trump tweeted on Monday morning.

The president has repeatedly exerted pressure on the Fed to hold off on rate hikes, saying the hikes will impede economic progress. In an earlier tweet in July, Trump said, “the United States should not be penalized because we are doing so well. Tightening now hurts all that we have done.”

In an earlier report, CNBC had called Trump’s Fed criticism “nearly without precedent” in U.S. history, noting that almost all of Trump’s predecessors “steered clear of” Fed critiques to make sure that interest rates were set to work best for the economy.

The Fed has raised its benchmark interest rate three times this year. It is poised to raise rates again at its next policy meeting later this week, according to the minutes of its most recent meeting released last month.

Fed Chairman Jerome Powell said in late November that interest rates were “just below” the broad range of estimates of the level that would be neutral for the economy.

Market participants interpreted that as a dovish signal for future rate hikes, compared with Powell’s previous remarks in early October that rates were “a long way” from neutral, a level neither stimulative nor restrictive to the economy.

But some Wall Street economists and analysts said that they did not see a major shift in Fed’s tightening monetary policy.

Almost all 60 economists polled by The Wall Street Journal earlier this month estimated that the Fed would raise rates again this week. They also expected the central bank will raise rates twice next year, a little bit less than the three times they expected when surveyed last month.

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