Trump claims Fed rate hikes hinder U.S. economy

Trump claims Fed rate hikes hinder U.S. economy

President Donald Trump accused China and the European Union of manipulating their currencies lower to make their goods and services less expensive to foreign buyers and again knocked the Federal Reserve for increasing interest rates in the USA, saying all undercut the nation's "competitive edge".

In an interview with CNBC, Trump said, "I'm willing to go to 500", referring to the $505.5 billion in goods imported from China in 2017.

"I'm not doing this for politics, I'm doing this to do the right thing for our country", Trump said.

And in a statement, the White House noted that Trump was not intending to exert any such influence: "Of course the President respects the independence of the Fed".

In excerpts of an interview with USA television network CNBC aired Thursday, Trump said a strong dollar "puts us at a disadvantage", adding that the Chinese yuan "has been dropping like a rock".

In excerpts of an interview with U.S. television network CNBC aired Thursday, Trump said a strong dollar "puts us at a disadvantage", adding that the Chinese yuan "has been dropping like a rock".

But one JPMorgan economists thinks Trump's public desire for lower interest rates could actually backfire.

For years presidents have avoided commenting on the Fed, which markets broadly trust to act in service of its dual objective - maintaining maximum inflation and stable prices - rather than a political aim.

Mr Trump's comments come before the most recent round of United States tariffs has had time to take effect. European auto shares fell on Friday in response to Trump's China comments. "I couldn't care less what they say, because my views haven't changed".

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This was not the first time Trump departed from a long-standing practice of USA presidents steering clear of commenting on Fed policy and the value of the dollar, a custom he dismissed on Thursday.

"I'm not thrilled", Mr. Trump said in an interview with CNBC, taking the rare step for a president of criticize the independent central bank that sets interest rates.

As president, Trump previous year said Yellen had "done a good job" and said he liked that she's "historically been a low-interest-rate person".

Trump tapped Powell, who had served as a governor at the US central bank, to serve at its helm following Janet Yellen.

Trump is limited in how much direct pressure he can put on the Fed chief. "In fact, an argument can be made that the President's comments may skew the Committee in a hawkish direction: if a decision is a close call then the appearance of kowtowing to the President may bias them toward raising rates".

Trump also said he was told by unspecified Chinese officials that "nobody would ever complain" from past administrations "until you came along - me".

Jerome Powell, chairperson of the Federal Reserve, speaks during a House Financial Services Committee hearing, on Capitol Hill in Washington, July 18. There will be many "who see that as the Fed yielding to a combative president", Conti-Brown said.

"Given what we know about Powell, we see little chance the President has gotten in his head", Feroli wrote in a note to clients. The central bank is expected to hike two more times this year.

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