Pres. Trump steps up his attacks on Federal Reserve's rate hikes

Monday, 15 Oct, 2018

"But I think the Fed has gone insane", he said. Some investors - and even President Donald Trump - worry the Fed could be moving too quickly.

President Donald Trump is not known to mince words.

He also sidestepped criticism of the Federal Reserve's monetary policy.

With significant drops in the Dow Jones Industrial Average, S&P 500, and broad-based stock market indexes, President Trump said markets are in a "correction", and decried the Federal Reserve's recent rises in interest rates and signals for more to come. On Thursday, he told Fox News the central bank "is going loco".

Gundlach said the Fed has entered auto-pilot mode, and would need to see weakness in the economy to stop raising rates.

World stock markets have taken a dive as Trump's attacks on "crazy" U.S. rate hikes add to borrowing cost concerns.

"Sentiment does remain fragile, having been initially a reaction to the sudden rise in U.S. bond yields, the selling has taken on a broader risk-off guise", warns Neil Wilson, chief markets analyst at Powell defended the Fed's plans to raise interest rates gradually in the coming months, saying it was appropriate policy in such "extraordinary" economic times. Bonds and stocks have sold off since last week Thursday as investors fear the impact of higher borrowing costs on financial conditions.

Rising rates may already be pinching parts of the USA economy, particularly housing and the auto market. He referred to the neutral interest rate that neither slows nor speeds the economy.

This suggests the Federal Reserve should lift rates at its December, March and June policy meetings "unless something changes", Mr. Kaplan said Tuesday in a Wall Street Journal interview. But as the campaign has continued, the attention of markets has increasingly turned to when the Fed would stop raising rates. Two weeks ago, the Fed raised its benchmark rate for the third time this year, and the federal funds rate now sits at a range of 2.00 percent to 2.25 percent. He frequently celebrates publicly when the stock market reaches new highs, pointing to the gains as affirmation for his economic policies.

"The fundamentals and future of the US economy remain incredibly strong", Sanders said in a statement.

Mr. Trump, asked by reporters in Pennsylvania if he's anxious about the sell-off, said he's not and launched into his frustrations with the Fed. The Bank of England raised United Kingdom rates in the summer, but right now is not looking like it has the guts to follow in the footsteps of the Fed, partly because of uncertainty still surrounding Brexit. Also, inflation has remained near the Fed's 2% objective.

"We must not forget the lessons of the past, when a lack of central bank independence led to episodes of runaway inflation and subsequent economic contractions", Powell said at a central banking conference in May.

European markets were braced for more losses with the FTSE100 in London poised to drop down below 7,000 points for the first time since March.

"And we have interest rates going up at a clip that's much faster than certainly a lot of people, including myself, would have anticipated", the US President said.

"What is happening now is that for every major economic release, investors are looking for data, whether it confirms what Powell said or contrasts what Powell has said", Arone told Business Insider.