Trump Says It Is 'Incredible' Fed Is Considering Another Rate Increase --update
December 17 2018 - 10:26AM
Dow Jones News
By Alex Leary
President Trump argued Monday on Twitter that it was
"incredible" that Federal Reserve policy members were considering
raising interest rates again, continuing his public campaign
against tighter monetary policy.
The Fed will conclude its final policy meeting of the year
Wednesday. Analysts widely expect the central bank to raise
short-term interest rates, but the focus will be on the outlook for
next year. Volatile markets and mixed inflation data have amplified
investors' doubts about how many times the Fed can raise rates.
"It is incredible that with a very strong dollar and virtually
no inflation, the outside world blowing up around us, Paris is
burning and China way down, the Fed is even considering yet another
interest rate hike," Mr. Trump tweeted. "Take the Victory!"
Private economists surveyed by The Wall Street Journal have
tempered their expectations for the path of interest rates next
year, and many foresee the Federal Reserve cutting rates starting
in 2020. Economist have pointed to the housing market, trade
tensions with China and others, and lower inflation as possible
reasons for the Fed to adopt a wait-and-see approach early next
year.
A Fed spokeswoman declined to comment on Mr. Trump's statement
Monday. The Fed has previously said its decisions are guided by
economic analysis and that they won't be influenced by political
pressure. The Fed says it is raising rates to return them to a more
normal setting and avoid the type of boom-and-bust economy that
ended in past recessions.
In a November speech, Fed Chairman Jerome Powell signaled fresh
flexibility in how the Fed sets interest rates but didn't say
policy makers' economic outlook had changed.
Mr. Trump has spent months criticizing the Fed. He blamed the
Fed for October's stock-market selloff, calling the central bank
"out of control, " and said that Mr. Powell seemed to enjoy raising
rates. He later called the Fed "a much bigger problem than China,"
referring to the trade battle.
"Every time we do something great, he raises the interest
rates," Mr. Trump said in an Oct. 23 Oval Office interview with The
Wall Street Journal, adding that Mr. Powell "almost looks like he's
happy raising interest rates."
Publicly, Mr. Powell has chosen not to respond to Mr. Trump's
criticism and he has worked to build support among lawmakers on
Capitol Hill and within the administration, meeting regularly with
Treasury Secretary Steven Mnuchin and National Economic Council
director Lawrence Kudlow.
Mr. Trump's Monday tweet was one of several on issues facing his
administration. He called on Democrats to work on health care
following a federal court decision on Friday striking down the
Affordable Care Act. The law remains in effect for now, however. He
also renewed pressure on Congress to fund his border wall.
Write to Alex Leary at alex.leary@wsj.com
(END) Dow Jones Newswires
December 17, 2018 10:11 ET (15:11 GMT)
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