Trump steps up at­tacks on Fed­eral Re­serve’s rate hikes

Lethbridge Herald - - BUSINESS AGRICULTURE - THE AS­SO­CI­ATED PRESS — WASH­ING­TON

Pres­i­dent Don­ald Trump on Thurs­day es­ca­lated his at­tack on the Fed­eral Re­serve’s in­ter­est rate in­creases, as­sert­ing that “the Fed is out of con­trol” and blam­ing it for this week’s plunge in stock prices.

“It’s a cor­rec­tion that I think is caused by the Fed­eral Re­serve with in­ter­est rates,” Trump said when asked by re­porters in the Oval Of­fice about the stock mar­ket swoon.

He added, “We have in­ter­est rates go­ing up at a clip that’s much faster than cer­tainly a lot of peo­ple, in­clud­ing my­self, would have an­tic­i­pated. I think the Fed is out of con­trol.”

It was the lat­est in se­ries of re­cent bar­rages the pres­i­dent has un­leashed at the Fed, which un­der his hand-picked chair­man, Jerome Pow­ell, has been grad­u­ally rais­ing rates as the econ­omy has strength­ened to pre­vent a run-up in in­fla­tion. Crit­ics have ex­pressed worry that the pres­i­dent’s at­tacks threaten the Fed’s abil­ity to op­er­ate free of po­lit­i­cal pres­sure.

Though Trump said he ob­jected to the Fed’s con­tin­ual rate hikes, he said in re­sponse to a ques­tion that he would not seek to oust the chair­man.

“No, I’m not go­ing to fire him,” Trump said. “I’m just dis­ap­pointed at the clip” that rates are be­ing raised.

Trump’s blunt pub­lic crit­i­cism of the Fed, which be­gan this sum­mer, is with­out prece­dent. His pre­de­ces­sors have taken care not to di­rectly at­tack the cen­tral bank’s rate pol­icy out of con­cern that such crit­i­cism could back­fire. In­vestors might, for ex­am­ple, ques­tion whether the Fed would feel free to keep rais­ing rates, if it felt it nec­es­sary to con­trol in­fla­tion.

Con­versely, some worry that the cen­tral bank might even raise rates faster than it oth­er­wise would, to demon­strate the in­de­pen­dence of its in­fla­tion-fight­ing pol­icy.

From its be­gin­ning, the Fed was de­signed to in­su­late it from po­lit­i­cal pres­sures. A full term on the seven-mem­ber Fed board lasts 14 years — a lengthy pe­riod that was seen as lib­er­at­ing Fed of­fi­cials from any fear that their rate de­ci­sions might cost their jobs.

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