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Trump's Fed criticism prompts fears he's questioning bank's independence

Trump's Fed criticism prompts fears he's questioning bank's independence

But despite Trump's comments, the Federal Reserve has long maintained that politics don't influence its decision making process.

In a series of tweets on Friday, Donald Trump complained about the Fed's current round of rate hikes, saying while policymakers in Europe and China are cutting their interest rates, America's central bank is doing the opposite, which is widening the trade imbalance he is trying to remedy.

"As usual, not a level playing field", he continued.

After the interview, Trump reiterated criticism of planned interest-rate hikes by the Federal Reserve, saying in a Twitter post that tightening policy would diminish any USA advantage in trade and exacerbate losses from "BAD trade deals".

Economists say state intervention in the affairs of central banks can have disastrous consequences, leading to hyper-inflation and devalued currencies.

"The escalating trade war, if it goes badly, could be a risk for the United States economy", Mr Bullard said, adding he understands the policy's objective. He believes the country should be allowed to re-coop money lost due to what he says is "illegal currency manipulation" and "bad trade deals". "I'm doing this to do this right thing for our country".

The White House in June already threatened to extend USA taxes on Chinese imports progressively to up to $450 billion. "As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions", it reads. So somebody would so 'oh, maybe you shouldn't say that as a president.' I couldn't care less what they say, because my views haven't changed.

After Trump's interview with CNBC was made public, Lindsay Walters, a White House spokeswoman, said the president "respects the independence of the Fed".

"Donald Trump will be the president until at least January, 2021". The central bank has always been seen as needing to operate free of political pressure from the White House or elsewhere to properly manage interest rate policy.

More news: LeBron reportedly opting out, becoming free agent

Mr Trump argued that higher rates put the United States at a disadvantage and impede faster growth.

"They're picking the wrong customer, I'll tell you that - you know how intense he is on this issue", he said, adding: "Xi seems to think if he waits out the November elections, Trump will be weakened and therefore will lighten the bite".

Currency traders may need to keep a closer eye on the president's Twitter feed.

"I am not happy about it", the president said.

Why does the Federal Reserve raise interest rates?

When it came to interest rates, Nixon told his advisers "we'll take inflation if necessary, but we can't take unemployment".

In a Marketplace interview earlier in July, Fed Chairman Jerome Powell said the Trump administration's tax cuts and fiscal-policy stimulus were likely to improve the economy for several years. The interview was taped Friday afternoon, and CNBC aired Trump's complaints about the Fed shortly after.

Mr Trump has said before that he favours low interest rates, and dismissed concerns about his interference.

Earlier this month, the U.S. imposed 25% tariffs on $34bn of Chinese imports.


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