Federal Reserve ‘my biggest threat’: Trump criticises rising interest rate rises1 min read . Updated: 17 Oct 2018, 11:56 AM IST
The Fed independently makes policy decisions but regularly reports to Congress
Washington: US President Donald Trump heaped more criticism on the Federal Reserve in an interview with Fox Business Network on Tuesday, extending his discontent beyond its chairman, Jerome Powell, whom he has frequently critiqued in public. “My biggest threat is the Fed," he said, according to excerpts released before the interview with “Trish Regan Primetime" airs. “I put a couple of other people there I’m not so happy with too but for the most part I’m very happy with people."
Last week, Trump criticized the US central bank twice, saying it was raising interest rates so swiftly that it threatened the country’s economic health. Nonetheless, in the face of a hot labour market and signs of inflation, the Fed has settled into a gradual policy tightening and is expected to raise interest rates again in December.
Past US presidents have been reticent to criticize the central bank because its independence is seen as important for economic stability. But Trump in the past week has called the Fed “crazy," “loco," “ridiculous," and “too cute."
Trump has said he is not trying to oust Powell, whom he appointed to replace former Chair Janet Yellen. The president also appointed two of the three other policymakers on the Fed’s powerful Board of Governors, Randal Quarles and Richard Clarida.
“Can I be honest? I’m not blaming anybody," Trump said in the interview. “I put (Powell) there. And maybe it’s right, maybe it’s wrong, but I put him there."
The Fed independently makes policy decisions but regularly reports to Congress. Data since the Fed’s last meeting in September has been in line with its portrait of a strong economy, and policymakers have said they expect to continue a rate-hike cycle that began in late 2015.
Republican US Representative Jeb Hensarling, who is set to retire as chairman of the House of Representatives Financial Services Committee that oversees the central bank, said Trump “clearly has his own style." But “I don’t think the fact that he has publicly criticized the Fed, in any way shape or form, is going to impinge upon (its) independence," he told Reuters.