Trump against the next expected Fed rate hike

President Donald WASHINGTON —

Trump on Monday urged the Federal Reserve not to raise interest rates, but Fed officials are widely expected to do so this week despite the president’s ongoing public effort to dissuade the U.S. central bank from putting any brakes on the economy.

“It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!” Trump wrote Monday in a Twitter post.

Fed officials will conclude their meeting on Wednesday, and Wall Street traders predict nearly an 80 percent chance the Fed raises rates a quarter-point this week, setting them at a range of 2.25 percent to 2.5 percent. That hike would keep rates low by historical standards but put them at the highest level in a decade.

The president’s repeated exhortations against the Fed raising rates break with his predecessors, who generally avoided commenting publicly on the central bank’s policies to protect its independence.

Interest rate increases are meant to check inflation, but they can also slow the economy. A slowing economy — or a recession — could damage Trump’s re-election efforts in 2020.

While the U.S. economy looks strong right now, there are signs of a potential slowdown. The Dow Jones industrial average is on track to end 2019 in the red, potentially notching the worst performance in a decade and erasing one of the president’s top talking points, that the market has thrived in his tenure. The housing market has also been weak and business investment dried up in the third quarter.

Still, the Fed is worried about the economy overheating and says small, gradual rate increases are the best way to to ensure inflation doesn’t rise too quickly and bubbles don’t form.