IMF Defends Rate Hikes After Donald Trump Comments On US Federal Reserve

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While he was generally upbeat about the United States economy, predicting that the good news could continue "effectively indefinitely", when asked on October 3, 2018, what keeps him up at night, Powell said, "Basically everything".

The Fed has said strong economic performance in the U.S. means that the ultra-low rates put in place to spur economic activity after the 2008 financial crisis are no longer necessary.

"I think I know about it better than they do", Mr. Trump said, again criticizing Fed interest-rate hikes. "That suggests the Fed will keep raising rates, and that's taking the wind out of the stocks that have done the most, particularly in the tech sector".

President Donald Trump renewed his attacks on the USA central bank on Thursday, saying it was "too aggressive" in raising interest rates.

"I don't think he's calling out the Fed, quote-unquote".

Kevin Hassett, the head of Trump's Council of Economic Advisers, said the president is expressing his views on monetary policy, but he isn't trying to "politicize" the Fed.

"I believe this selling is an overdone panic", Feinseth said.

Fear that the U.S. Federal Reserve will pump the breaks on robust U.S. economic growth with more rate hikes is a good place to start, according to Oliver Jones, a markets economist at Capital Economics.

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Trump's criticisms mark a stunning departure from the practices of his recent predecessors. Since the close of Wednesday's trading session on Wall Street he has called the Fed "crazy", "loco", "ridiculous", and "too cute", while saying its rate increases are "too aggressive", and "a big mistake".

"I think it's good", Trump said of the stock decline.

US stocks gained ground after the inflation report but then headed lower again after White House economic adviser Larry Kudlow told CNBC that no new negotiations have been set with China to reduce trade tensions between the world's two largest economies. "He is giving his opinion, and it's an informed opinion". Along with Dow, the S&P 500 tumbled 3.3 percent and the Nasdaq composite fell by four percent. The S&P 500 remained near the lowest since July on Thursday morning, while the Nasdaq 100 rallied.

The IMF's latest report on world financial stability, released Wednesday, said global growth could be at risk if emerging markets deteriorate further or trade tensions escalate. And I have a lot more to do if I want to do it and I don't want to do, but they have to come to the table.

One reason why the Fed has been raising interest rates even with little sign of an inflation breakout is because the unemployment rate, which fell to 3.7 percent in September, is at a level that many officials expect will cause wage and price gains to accelerate over time.

Powell and Trump haven't personally discussed the matter, the Fed chair has said, but Trump's rhetoric has alarmed some Democrats and Republicans on Capitol Hill.

Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the losses caught him off-guard, he thought many investors were unduly frightened by the rising rates. Higher interest rates could increase his debt payments considerably.

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