Posted Date: 24/10/2018
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What is the biggest risk of being asked about the US economy? Trump Federal Reserve

What is the biggest risk of being asked about the US economy? Trump: Federal Reserve

(Original title: Trump continues to scream at the Fed chairman: Every time we want to do something good, he raises interest rates)

Trump and Powell

Trump once again "fired" the Fed.

On October 23, local time, US President Trump said in an interview with The Wall Street Journal. The Fed’s continued rate hike will threaten US economic growth.

When asked by reporters what the biggest risk of the US economy is, Trump's answer is only one: the Fed. Trump also bluntly said that he had given Fed Chairman Powell a clear reminder that he wanted low interest rates. "Every time we want to do something good, he raises interest rates. Powell seems to like to raise interest rates... It may be too early, but it may be too early, but I may regret having nominated Powell."

Trump believes that economic growth is his credit, but the current interest rate policy can not be compared with the Democratic Party, because the Obama period is a zero interest rate policy. "How do we compare with the Democrats? If I remember correctly, Obama will have zero interest rates."

"For me, the Fed is the biggest risk, because I think the interest rate is rising too fast. Powell should have been a low-interest-rate guy. It turns out that he is not.... The Fed is theoretically Independent, but my instinct tells me that the rate hike is too fast now.

Interestingly, when asked about the circumstances under which he would replace Powell, Trump said, "I don't know, I just want to say that I am very dissatisfied with the Obama policy's zero interest rate policy."

The Federal Reserve Act, amended in 1935, stipulates that the president can “reasonably” replace the Fed governor, not the Fed chairman. Trump’s previous request for a low-rate president was Bush. He criticized Greenspan’s failure to lower interest rates, which led to the 1990-1991 recession, which led to his defeat in 1992.

The Fed raised interest rates again by 25 basis points at the September monetary policy meeting, raising the federal funds rate to the 2%-2.25% range. The latest Fed dot-matrix chart shows that Fed officials expect to raise interest rates once in 2018, raise interest rates three times in 2019, and raise interest rates once in 2020. At the press conference after the meeting, Powell pointed out that the US monetary policy is still "far from neutral" and suggests that there is still room for further rise in the federal funds rate. And the Fed announced that the minutes of the September Open Market Committee (FOMC) meeting showed that all FOMC members felt it would be appropriate to continue to raise interest rates gradually, and most members supported interest rates temporarily exceeding their expected long-term neutral levels.

Only a few hours after the release of the Fed’s September meeting on monetary policy resolutions, Trump bluntly said, “I am a low-rate supporter.” He also expressed his dissatisfaction with the interest rate hike “I righteously,” I am not happy about this... I would rather pay my debts or do something else to create jobs." 

In the second week of October, US stocks were “blood washed”. The three major stock indexes were low in collective innovation. The S&P 500 fell for five days, setting the longest losing streak since Trump was elected president. Trump continued in that week. Three times to criticize the Fed and Powell, he said that the Fed is crazy, and the correction of US stocks is caused by the Fed.

Trump continues to scream at the Fed chairman Every time we want to do something good, he raises interest rates


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