donald trump slams aggressiveae us federal reserve as share market tumbles

Written by The ReReport

US PRESIDENT Donald Trump has renewed his attacks on the US central bank, saying it was “too aggressive” in raising interest rates.“I think they’re making a big mistake,” Mr Trump said during a broadcast of Fox & Friends.media_cameraFederal Reserve Board Chairman Jerome Powell. Picture: GettyWhile he acknowledged that higher rates helped savers, he criticised the Federal Reserve’s tactics.“They’re being too aggressive.”The comments followed his unprecedented criticism when he said the Fed had “gone crazy,” and blamed the interest rate increases for the stock sell-off, which caused the Dow Jones Industrial Average to lose more than 800 points, in its worst tumble since February.The Dow continued to fall yesterday amid a sell-off in tech shares.media_cameraStock price movements continued downwards. Picture: AFPThe rout caused a domino effect worldwide, with losses spreading to Asia and Europe as investors remained concerned about rising rates — which would send more buyers out of equities and into bonds — as well as the impact of Mr Trump’s trade conflict with China on corporate profits.media_cameraUS President Donald Trump shakes hands with his nominee for Chairman of the Federal Reserve, Jerome Powell (R). Picture: AFPBut not long after he spoke, White House economic adviser Larry Kudlow said Mr Trump’s opinions had no weight on the Fed’s actions.“We know the Fed is independent. The president is not dictating policy to the Fed. He didn’t say anything remotely like that,” he said on CNBC.media_cameraFederal Reserve Board Chairman Jerome Powell. Picture: GettyMr Kudlow said the Fed was managing “the transition from ultra, ultra easy money … to something more normal,” by raising rates gradually.He also echoed Mr Trump’s statement that the stock market decline was an expected “normal correction.”Mr Trump has repeatedly touted the spate of Wall Street records as proof of the success of his economic program, including his confrontational trade strategy, and criticised the Fed for raising the benchmark interest rate — three times this year — saying it would undermines his efforts.In fact it is largely his policies that are behind the changes: tax cuts and increased government spending are expected to juice the economy, adding to the Fed’s justification to raise interest rates.media_cameraJerome Powell replaced Federal Reserve Chair Janet Yellen (L). Picture: AFPFed Chair Jerome Powell, whom Mr Trump named to lead the central bank, has brushed off the comments, saying officials do not pay attention to politics.“This is just who we are and I think who we will always be, which is, we’re a group who — we’re quite removed from the political process,” Mr Powell said in a recent interview.“And we just try to do the right thing for the medium and longer term for the country.” International Monetary Fund chief Christine Lagarde also defended the Fed on Thursday.Raising interest rates was justified “for those economies that are showing much improved growth, inflation that is picking up … unemployment that is extremely low,” Ms Lagarde told a press briefing in Bali, Indonesia where the IMF is holding its annual meeting.Originally published as Trump slams ”˜aggressive”™ US Fed

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