Published: Thu, October 11, 2018
Money | By Armando Alvarado

I don't like Fed raising interest rates so quickly, says Trump

I don't like Fed raising interest rates so quickly, says Trump

President Donald Trump said the Federal Reserve is moving too fast with interest-rate increases and dismissed concerns about inflation, extending his run of criticism that central bankers have largely disregarded as they push ahead with higher borrowing costs. The Fed is doing what it thinks is necessary, but I don't like what they're doing because we have inflation really checked and we have a lot of good things happening.

"The Fed has gone insane", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally.

But he's also calling the drop "a correction we've been waiting for for a long time".

The Dow Jones dropped by more than 800 points on Wednesday in one of the worst days for the stock market since February, and President Donald Trump had an explanation ready when asked by reporters.

The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the United States central bank. Presidents for more than two decades had avoided public comments on the Fed's interest-rate policies as a way of demonstrating respect for the institution's independence.

He has frequently criticised the U.S. central bank for gradually raising interest rates, and on Wednesday reiterated his position: "I really disagree with what the Fed is doing".

Fed spokeswoman Michelle Smith declined to comment on Trump's remarks.

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They include the USA trade war with China and its potential impact on global growth, while rising bond yields have diverted attention from equities - stocks - which have been offering the most attractive returns for years because central bank stimulus had flooded markets with cheap money.

"My assumption for the policy rate is that we can achieve our objective of keeping inflation to the 2 percent symmetric objective and the unemployment rate slowly rising back towards its sustainable rate with that stance of funds rate - but if we need more, we'll do more", he said.

In September, the Federal Reserve raised short-term interest rates for the third time this year.

White House Press Secretary Sarah Huckabee Sanders said in a statement following the close of markets that the US economy is "incredibly strong" despite the sell-off.

Last week's jump in yields followed strong United States data but many analysts have been anticipating a change in the dynamics in the bond market due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes.

During an event earlier Wednesday amid the sell-off, Trump and his top economic adviser, Larry Kudlow, said they believed the US economy was strong. "I like to stay uninvolved", Trump said.

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