Published: Mon, July 23, 2018
Finance | By Kristine Clayton

Trump ratchets up criticism of Fed interest rate rises

Trump ratchets up criticism of Fed interest rate rises

The remarks on Twitter early in the day followed a CNBC interview in which Trump said he was willing to hit all Chinese imported to the United States with tariffs.

The comments sent USA markets sliding early Friday.

Asked on CNBC if he is ready to go to $500 billion - a number that almost matches the $505 billion in products that China exported to the 2017 - Trump said, "I'm ready to go to 500".

The White House in June already threatened to extend punishing United States duties progressively to up to $450 billion in Chinese imports.

The US imported $US505 billion worth of goods from China in 2017, according to Census Bureau data.

Beijing is targeting sectors, like agriculture, that could harm Trump politically at home, though he said in the CNBC interview that he is seeking to do only what is fair.

"But I don't like all of this work that goes into doing what we're doing", Trump said, arguing that the Fed's hikes could disrupt economic growth.

Mr Trump's comments come before the most recent round of USA tariffs has had time to take effect.

Goods already affected by Trump's tariffs against China include batteries, trains, and ball bearings, but they could extend to more consumer goods if further tariffs are imposed.

Against the Japanese yen, the dollar recouped some of its losses after dropping as low as 112.05 yen from a six-month high of 113.18 yen on Thursday.

With trade tensions rising, so is the pushback in the USA from private business that see potentially devastating ramifications, not only from China, but from Europe, Canada, and other countries in Asia. He was referring to the $ 500 billion worth of import from China to the United States every year. Last year, the U.S. imports from China reached $ 505.5 bn, while exports were at only $ 129.9 bn.

President Donald Trump broke a multi-decade tradition by weighing in on the Federal Reserve's monetary policy.

Presidents historically do not comment on the Fed's policy as it could be viewed as influencing the bank's decisions, which are meant to be independent of political influence.

Fed Chair Jerome Powell (who was appointed by Trump) stressed to Marketplace in his first broadcast interview that the Fed is politically independent. Tightening now hurts all that we have done.

Despite this, Trump said that the Fed should keep rates low so the USA economy could make up lost ground to China. "He was being asked - pestered really - about a series of Fed rate hikes", Low said. In June, the nation's central bank raised rates for the seventh time since December 2015, in a move created to slowly cool the economy. The Fed, concerned about too rapid an expansion that is fueled in part by the enormous fiscal stimulus ushered in by the White House, is slowly raising rates to keep the economy from overheating.

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