Published: Fri, October 12, 2018
Money | By Ralph Mccoy

Biz leaders fight Trump on Fed critique

Biz leaders fight Trump on Fed critique

"He has never attacked the Fed's plan or strategy, " Kudlow told reporters on the White House lawn Thursday.

President Donald Trump said he believes "the Fed has gone crazy" amid recent interest rate hikes.

Trump has previously criticized the Federal Reserve for its interest-rate hikes and said it did not "have to go as fast".

Tiger 21 Chairman Michael Sonnenfeldt told FOX Business' Maria Bartiromo on "Mornings with Maria" Thursday that Trump's "jawboning" of the central bank is "new territory".

When asked about the steep fall of the stock market, Trump said he was not anxious about it.

"The Fed has gone insane", Mr. Trump told reporters while traveling to Erie, Pennsylvania, for a campaign rally.

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

Trump has departed from that practice and has said he would not shy from future criticism should the Fed keep lifting rates.

The comments followed his unprecedented criticism late Thursday, when he said the Fed had "gone insane", and blamed the interest rate increases for the stock selloff, which caused the Dow Jones Industrial Average to lose more than 800 points, in its worst tumble since February.

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The IMF's latest report on world financial stability, released Wednesday, said global growth could be at risk if emerging markets deteriorate further or trade tensions escalate.

The US and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other's goods over the past few months. The IMF projections don't take into account Trump's threat to expand the tariffs to effectively all of the more than $500 billion in goods the US bought from China a year ago.

"Part of President Trump's brand is he says what he thinks, but he respects the independence of the Fed and that's clear from his nominations", Hassett said at Council on Foreign Relations on Tuesday.

One former Treasury official said while Trump's comments are unusual, they don't appear to be changing the Fed's direction.

Powell's goal is to extend the second-longest US economic expansion on record by moving interest rates up just quickly enough to prevent overheating, but not so rapidly that the central bank chokes off growth.

He said he didn't think the current rate of U.S inflation merits higher borrowing costs.

White House Press Secretary Sarah Sanders said in a statement following the close of markets that the USA economy is "incredibly strong" despite the sell-off, which analysts attributed in part to trade tensions with China.

White House officials, including Mr Trump, have dismissed the declines as standard corrections after a long run of rising share prices.

But the Federal Reserve has been gradually raising its interest rates since 2015, bringing the target for its benchmark rate to a range of 2% to 2.25% last month.

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