Trump criticizes moves by Fed, China, EU

President Donald Trump accused China and the European Union of manipulating their currencies and continued to criticize the Federal Reserve for raising interest rates, saying those moves are putting the United States at a disadvantage.

In a flurry of early morning Twitter posts Friday, Trump complained that the Fed’s rate increases and a “stronger and stronger” U.S. dollar are “taking away our big competitive edge.” He also said the Fed’s plan to raise rates — known as tightening because it makes borrowing more expensive — “hurts all that we have done.”

“The United States should not be penalized because we are doing so well,” Trump wrote Friday. “Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates - Really?”

His comments once again break with long-standing White House norms, in which U.S. presidents tend to talk sparingly about the U.S. dollar and, when they do, generally reiterate that a strong dollar is in the national interest. On Thursday, Trump drew criticism for saying in an interview with CNBC that he did not like the Fed’s interest rate decisions.

Trump, along with Republican lawmakers, is trying to make a booming economy a big issue in the midterm elections.

The Fed, meanwhile, is shifting away from a decade of ultralow rates that supported growth — and it is beginning to gently tap the brakes, in order to prevent the economy from overheating.

Fed officials are gradually and steadily raising interest rates as the economy strengthens, a strategy that began under previous Chairwoman Janet L. Yellen and has continued under Chairman Jerome H. Powell, Trump’s pick to replace her.

While financial markets seemed to shrug off Trump’s initial comments on the Federal Reserve on Thursday, his Twitter posts on Friday — all of which seemed aimed at pushing the dollar lower — drew a reaction.

The dollar, as measured by the U.S. Dollar Index, fell sharply, by roughly 0.6 percent. Prices of 30-year U.S. Treasury bonds, which are highly sensitive to changes in inflation expectations, also dropped, pushing yields — which move in the opposite direction — higher. Prices for gold, a traditional hedge against inflation risk, rose.