Fed officials discussed hiking rates to ‘restrictive’ level

Fed officials discussed hiking rates to ‘restrictive’ level

Fed officials discussed hiking rates to ‘restrictive’ level

The dollar rose as minutes of the Federal Reserve's latest meeting showed that every Fed policymaker backed raising interest rates last month and also generally agreed that borrowing costs were set to rise further.

Participants in the Fed's rate-setting committee also "generally anticipated that further gradual increases" in short-term borrowing costs "would most likely be consistent" with the kind of continued economic expansion, labor market strength, and firm inflation that majority are anticipating, the minutes showed.

Trump, though, has stepped up his attacks of late, and in an interview Tuesday he went so far as to call the Fed, with its steady rate hikes, "my biggest threat".

Over the past few decades, presidents have typically refrained from commenting on the Fed's interest rate policy, since the central bank is independent and presidential pressure on the Fed typically ends in disaster.

"I'm not happy with what he's doing", said Trump in his interview with Fox Business on Tuesday, referring to chairman Jerome Powell, who was appointed by Trump past year.

While the Fed is politically independent and its policymakers have nearly uniformly signaled they intend to keep tightening monetary policy in the face of record low unemployment and signs of inflation, some economists have warned that Trump's hectoring could eventually harm its legitimacy.

"The current level of the policy rate is about right", Bullard said of the US central bank's current short term policy rate, which is set in a range of between 2.00 percent and 2.25 percent.

The Fed has been gradually increasing rates since 2015.

"The fact that they refrained from labeling China a currency manipulator is a positive development, especially from the point of view of emerging market currencies", said Attrill.

"There are a lot of other people there I'm not so happy with", he said.

Trump appointed Powell but told Fox, "maybe it's right, maybe it's wrong".

The former Fed chair's comments add to a chorus of voices who say it's unusual and even perhaps unsafe for a president to openly criticize central bank policy, which is charged by Congress with focusing on delivering maximum sustainable employment and stable prices.

Quarles, in addition to Richard Clarida, are the two current members of the board to have been nominated by Trump. "The Fed is going loco and there's no reason for them to do it and I'm not happy about it".

Trump claimed that the biggest problem facing the United States economy and stock market is the Fed's path of interest rate hikes under Chairman Jerome Powell. Other officials felt the Fed shouldn't take that step unless there are signs the economy is overheating and inflation is rising quickly.

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