Trump says US Fed moving too fast with interest-rate increases
Washington, US – US President Donald Trump said the US 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.
“I don’t like it,” Trump said on Tuesday at the White House, referring to the Fed’s rate hikes, the most recent of which was September 26. “I think we don’t have to go as fast.”
“I like low interest rates,” Trump said.
Fed chairman Jerome Powell is aiming to extend the secondlongest US economic expansion on record by moving interest rates up just quickly enough to prevent overheating, but not so rapidly that the central bank chokes off growth. Powell said last week he expects to stick with the current path of gradual interest-rate hikes while monitoring risks in the economy.
Trump said on Tuesday that the economy is enjoying ‘record- setting’ numbers. “I don’t want to slow it down even a little bit, especially when we don’t have the problem of inflation.”
‘You don’t see that inflation coming back. Now at some point’ inflation will come back, he said. “I just don’t think it’s necessary to go as fast.”
The central bank’s preferred measure of inflation is roughly at policy makers’ two per cent objective, and Powell said last week that ‘the outlook of forecasters inside and outside the Fed is for more of the same’.
Even so, one reason why the Fed has been raising interest rates even with little sign of an inflation breakout is because the unemployment rate, which fell to 3.7 per cent in September, is at a level that many officials expect will cause wage and price gains to accelerate over time.
“Our course is clear: Res- olutely conduct policy consistent with the FOMC’s symmetric two per cent inflation objective, and stand ready to act with authority if expectations drift materially up or down,” Powell said last week, referring to the policy-making Federal Open Market Committee.
Trump indicated he had not spoken with Powell. “I like to stay uninvolved,” Trump said.