Trump escalates his attack on Fed: ‘My biggest threat’

Trump escalates his attack on Fed: ‘My biggest threat’

Trump escalates his attack on Fed: ‘My biggest threat’

The discussion, revealed in minutes of the September 25-26 meeting released Wednesday, shows that a few participants believed that the Fed's key interest rate would need to "become modestly restrictive for a time" to guard against inflation climbing too high.

U.S. stock markets, which had largely expected a "steady as you go" statement, moved slightly higher but remained loss-making after the update, which stressed a continuation of the Fed's "gradual" approach to rate rise policy.

"I'm not blaming anybody, I put him there", Trump responded.

Trump, who has openly criticized the Fed since July, doubled down on Tuesday, declaring the Fed his "biggest threat" in an interview on Fox Business. Right now, however, inflation rates are unusually low for an economy with such a low unemployment rate.

Despite fierce blowback from President Trump, the Federal Reserve's policymakers unanimously agree they should keep hiking interest rates to cap inflation.

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During the meeting, which was held on September 25-26 policymakers said they believed further rates rises were required to stop inflation from shooting the 2pc inflation target and to reduce the risk "posed by significant financial imbalances".

The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating.

Trump's criticism intensified after last week's big stock market tumble, which has been partially reversed this week. The Dow Jones Industrial Average jumped 547 points. Mnuchin said Trump's complaints simply reflected his preference for low interest rates.

In the minutes, policymakers said estimates of the neutral rate would only be "one among many" factors going into monetary policy decisions.

But, amid brisk American expansion, some Fed policymakers also warned of looming dangers to the world economy, such as the potential for a strengthening U.S. dollar and possible contagion from sputtering emerging markets, according to minutes from the Fed's most recent meeting three weeks ago. The display of solidarity raises the prospect of a fourth rate-hike this year in December. But the courts ruled in a case decades ago involving the Federal Trade Commission that this language has to involve more than a policy disagreement between the president and the Fed.

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