Chart of Fed Funds rate vs. gold price. Source

Asked in the Wall Street Journal interview what he saw as the biggest risks to the USA economy, Mr Trump said: "To me the Fed is the biggest risk, because I think interest rates are being raised too quickly".

While his remarks were a bit more tempered than those of his colleagues earlier this week, Clarida said he sees "further gradual adjustment" in the Fed's benchmark funds rate as likely. "They have a right to act the way they do", Hatch said.

Trump told the Wall Street Journal on Tuesday that the Federal Reserve Bank was the "biggest risk" to the USA economy, and suggested that its Chairman, Jerome Powell, was going on an interest-rate-raising spree because it makes him "happy".

For the third week in a row, President Donald Trump is criticizing Jerome Powell, the man he picked to lead the Federal Reserve.


"I really think it is not a desirable thing for a president to comment so explicitly on Fed policy", she said. Boockvar said Powell's comments give the impression that the Fed does not appear to have a sense of urgency because he noted that there's no clear sign of inflation accelerating above the Fed's target of 2 percent.

If inflation were to materialize, Trump said he would rather raise rates "slower and heavier, at a later date", precisely the scenario the Fed has said it wants to avoid so that it does not inadvertently trigger a recession by tightening too aggressively.

The central bank is trying to cool down the red-hot economy after Washington's debt-fueled tax cuts and spending surge. He can't remove Fed governors, including Powell, except for ill-defined "cause", and the Senate must confirm replacements.

This month he has called the Fed "crazy" and a threat to economic growth.


Since the end of 2015, after almost ten years of monetary policy rates near zero to support a recovery slow and poor, the Fed has gradually moved the rate of interest in the day-to-day, which are now between 2% and 2.25%. He's also slammed it as "out of control" and said it was "going loco". The target range for the federal funds rate, now at 2 per cent to 2.25 per cent, is low by historical standards. When factoring in inflation, the rate on short-term borrowing is near zero percent.

Most officials expect the Fed to raise it again at its December meeting.

Trump's criticisms mark a departure from the practices of his recent predecessors. Trump accredited that the Federal Reserve is usually independent of political influence, but he still pressed his attacks and seem to view US' present financial performance as a rivalry between himself and former President Barack Obama. This article is strictly for informational purposes only.


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