New Fed vice chair signals more rate hikes ahead despite Trump attacks

New Fed vice chair signals more rate hikes ahead despite Trump attacks

New Fed vice chair signals more rate hikes ahead despite Trump attacks

President Donald Trump in a straight line blamed Jerome Powell, Chairman of Federal Reserve, for menacing the US economy by an increase in interest rates, as per to The Wall Street Journal.

Federal Reserve Vice Chairman Richard Clarida, in his first major policy speech since being seated at the central bank, said more interest rate increases are likely warranted as the economy continues to gather strength.

He said Fed chairman Jerome Powell "almost looks like he's happy" to be raising interest rates.

Trump was also cited in the report as say that it was "too early to say, but maybe he regrets nominating Mr. Powell". "To me the Fed is the biggest risk, because I think interest rates are being raised too quickly", he told the Wall Street Journal. The Federal Reserve has increased interest rates thrice in this year since the USA economy has agitated and it is likely anticipated to hike again before this year ends.

Trump has called the Fed's policy of gradual interest rate increases "crazy" and the "biggest threat" ahead of midterm congressional elections on Nov 6.

Orrin Hatch, Republican chairman of the Senate Finance Committee, on Wednesday defended Powell, telling Bloomberg News, "I don't agree with everything they do but they are still pretty good people". There's nothing investors hate more than a central bank that is not independent. In an interview with The Wall Street Journal published yesterday, he stepped up his attack on the institution and put...

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Economists have generally given Powell high marks on his performance, arguing the Fed is acting wisely by gradually returning monetary policy to normal levels after the worst recession in 75 years. "And because there's a lot of uncertainty about what neutral is, if you read between the lines, it's conceivable that you could make the case that as they approach neutrality they could go a little slower".

The central bank is trying to cool down the red-hot economy after Washington's debt-fueled tax cuts and spending surge. Bostic also said that falling stock prices, ongoing trade tensions and other "headwinds" were unlikely to change the Fed's perspective.

Wednesday was not the first time the USA president has hit out at the Federal Reserve and its monetary policy since the appointment of Jerome Powell to the helm back February.

The Federal Reserve has raised interest rates eight times since the end of 2015, and on three occassions since Powell was appointed in 2018, taking the Federal Funds rate range to between 2% and 2.25%.

At the Rose Garden ceremony marking his nomination by Trump to the chairmanship, Powell was careful to slip into his remarks a reference to the Fed's independence: "I strongly share that sense of mission and am committed to making decisions with objectivity and based on the best available evidence, in the longstanding tradition of monetary policy independence".

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