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Trump Doesn't Like Fed's Pace Of Interest Rate Hikes

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Continuing his precedent-breaking trend of publicly commenting on the Federal Reserve's monetary policy, President Donald Trump said Tuesday he does not like the pace at which the central bank is raising interest rates.

"I like to see low interest rates," Trump told reporters as he prepared to depart for a campaign rally in Iowa. "The Fed is doing what they think is necessary, but I don't like what they're doing."

"I will say this: We're normalizing money, and that's good," he added. "But I think we don't have to go as fast."

The comments from Trump come after the Fed raised interest rates by a quarter point to 2 to 2.25 percent last month, marking the third rate hike this year.

The Fed's projections for future rates also pointed to one more increase in rates this year and three rate hikes next year.

Arguing that inflation has been held in check, Trump said he does not want to see Fed policy lead to a slowdown in recent economic growth.

"I don't want to slow it down even a little bit, especially when you don't have the problem of inflation. And you don't see that inflation going back," Trump said. "Now, at some point it will, and you go up. I just don't think it's necessary to go as fast."

Trump said he has not spoken to Fed Chairman Jerome Powell about his views on rates, claiming he likes to "stay uninvolved."

Past presidents largely refrained from commenting on Fed policy, but Trump has repeatedly criticized the central bank for raising rates in recent months.

In a post on Twitter in July, Trump suggested the Fed's plan to gradually raise rates could hurt recent economic progress, claiming the rate hikes penalize the U.S. for doing well.

"The United States should not be penalized because we are doing so well," Trump tweeted. "Tightening now hurts all that we have done."

He added, "The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?"

In remarks at the Atlantic Festival in Washington, D.C. last Wednesday, Powell argued interest rates are "a long way from neutral" even after recent increases.

"The really extremely accommodative low interest rates that we needed when the economy was quite weak, we don't need those anymore. They're not appropriate anymore," Powell told Judy Woodruff of PBS.

"Interest rates are still accommodative, but we're gradually moving to a place where they will be neutral," he added. "We may go past neutral, but we're a long way from neutral at this point."

Recent increases in treasury yields on the heels of upbeat U.S. economic data have led to concerns the Fed may raise rates more aggressively than currently anticipated.

CME Group's FedWatch tool currently indicates an 81.4 percent chance the Fed will raise rates by another quarter point to 2.25 to 2.5 percent at its December meeting.

(Photo: Gage Skidmore)

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