Economy

What Trump Says Is the Biggest Threat to His Presidency

What Trump Says Is the Biggest Threat to His Presidency

In the end, the Fed modestly raised its key short-term rate and predicted that it would continue to gradually tighten credit to manage growth and inflation amid a steadily healthy job market and economy.

Inflation rates hit a six-year high in July. That consideration was cited by a number of officials at their meeting last month, according to minutes of the gathering released Wednesday.

The ascending reconciliation to the USA interest rates is too swift declared Trump, because inflation is very low.

"Powell's task has been made much more complicated by what Trump has said", said economist Joseph Carson. Carney came to Powell's support in an interview as he said that the latter "is an individual that really understands the plumbing of the USA and global financial systems".

Although Trump wasn't mentioned directly during the meeting, the committee still discussed the policies of the incumbent emphasizing the risk they pose to the economic growth.

The Federal Reserve's current monetary policy path would raise the risks of recession in an economy where recent, unexpectedly strong growth may start to taper anyway, St. Louis Fed President James Bullard said on Thursday. "Obviously, presidents can speak out if they choose to and give their opinions about policy, there's no law against that, but I don't think it's wise and I do think the Fed has a strong reputation for acting in an independent and non-political way and I would not like to see that reputation damaged".

Trump has recently been vocal in his displeasure with the pace of the Fed's interest rate hikes.

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The meeting took place three weeks ago - before last week's global market meltdown that saw stocks and bond prices hit sharply amid jitters over rising United States rates and the U.S. trade war with China. Analysts have pointed to rising interest rates, which can make stocks a less attractive investment.

Gold prices held steady early Thursday, after dipping in the previous session on a firmer dollar after minutes of the Federal Reserve's September meeting reinforced expectations of a tighter U.S. monetary policy.

In theory, Trump's concern that the Fed could potentially threaten economic growth isn't without cause.

Sealed Air Corp shares tumbled 8.1 percent after the packaging company lowered its full-year profit outlook due to higher-than-expected raw material and freight costs. That would put it above the 3 percent level which the Fed now pegs as its "neutral rate".

Cohn responded to reports he left the administration over trade policy, and admitted - even if indirectly - he is opposed to President Trump's use of tariffs to create leverage for better trade deals for America. The Fed noted that business contacts had expressed worries about lost markets and rising prices for steel and aluminum.

The market has priced in another hike in December, with three more increases expected in 2019, which would take rates in the U.S. to a level slightly above neutral.


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