ibusinesslines.com
ibusinesslines.com November 15, 2018


Mnuchin plays down U.S. market swoon as global rout rolls on

11 October 2018, 05:58 | Kelvin Horton

President Donald Trump again criticized the Federal Reserve for raising interest rates following the worst market sell-off since February. "It's so tight. I think the Fed has gone insane", Trump told reporters shortly after markets closed, as he arrived in Erie, Pennsylvania for a rally.

He adds, "I think the Fed has gone insane".

Wall Street's rout is a natural correction and not caused by any particular factors, US Treasury Secretary Steven Mnuchin said Thursday, after his boss Donald Trump hung blame for the losses on US interest-rate increases.

The president took aim at the Federal Reserve, led by Jerome Powell whom he personally chose to lead the bank, after the Dow Jones Industrial Average fell 3%, or more than 800 points, in Wednesday trading - its worst drop in eight months.

The Federal Reserve can likely stop raising United States interest rates once they reach about 3 per cent, as long as inflation remains around 2 per cent and the economy is doing well, Chicago Federal Reserve President Charles Evans suggested on Wednesday.

Bank of England Governor Mark Carney also joined in, saying "I think the sanest way to answer that question is to associate myself entirely with Lesetja's answer".

"I wonder today whether Trump really has some buyer's remorse with respect to selecting Powell as his Fed chairman, because that was a odd pick", Moore said.


Mr. Trump said earlier this week that he thought the central bank was moving too quickly with a series of planned interest rate hikes. "The trade war with China, we're taking in billions of dollars in tariffs from China, from Chinese goods, and it hasn't hurt us at all".

The Fed traditionally remains outside the purview of the President, though Trump has at moments blurred the lines by commenting on Fed policy. Officials expect to hike rates another quarter percentage-point by the end of this year and gradually continue to raise rates at least through 2019.

White House Press Secretary Sarah Huckabee Sanders said in a statement following the close of markets that the USA economy is "incredibly strong" despite the sell-off. "President Trump's economic policies are the reasons for these historic successes and they have created a solid base for continued growth".

Some of his former advisers said they believed Trump's criticisms of the central bank were warranted.

Trump has said he likes low interest rates, in part because of his background in real estate.

Trump said Tuesday that the economy is enjoying "record-setting" numbers and "I don't want to slow it down even a little bit, especially when we don't have the problem of inflation".



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