Trump Steps Up His Attacks On Federal Reserve’s Rate Hikes
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"It's a correction that I think is caused by the
He added, "We have interest rates going up at a clip that's much faster than certainly a lot of people, including myself, would have anticipated. I think the Fed is out of control."
It was the latest in series of recent barrages the president has unleashed at the Fed, which under his hand-picked chairman,
Though Trump said he objected to the Fed's continual rate hikes, he said in response to a question that he would not seek to oust the chairman.
"No, I'm not going to fire him," Trump said. "I'm just disappointed at the clip" that rates are being raised.
Trump's blunt public criticism of the Fed, which began this summer, is without precedent. His predecessors have taken care not to directly attack the central bank's rate policy out of concern that such criticism could backfire. Investors might, for example, question whether the Fed would feel free to keep raising rates, if it felt it necessary to control inflation.
Conversely, some worry that the central bank might even raise rates faster than it otherwise would, to demonstrate the independence of its inflation-fighting policy.
From its beginning, the Fed was designed to insulate it from political pressures. A full term on the seven-member Fed board lasts 14 years — a lengthy period that was seen as liberating Fed officials from any fear that their rate decisions might cost their jobs.
The law creating the
No Fed chairman has ever been fired by a president, though some have been denied a subsequent four-year term as chairman. President
In recent memory, no president has been so openly critical of the central bank. The last president to voice any criticism in public was
While campaigning in 2016, Trump had been highly critical of the Fed, contending that under Chair
In recent days, he has escalated his attacks. In a late night phone call Wednesday with
"We know the Fed is independent," Kudlow said. "The president is not dictating policy to the Fed. They are independent; they're going to do what they're going to do."
Powell, when asked about Trump's criticism in recent weeks, has chosen not to respond directly. Rather, he has stressed that the central bank handles its job without regard to politics.
Powell has said that Fed officials think their approach to raising rates at a gradual pace will extend the current expansion by keeping inflation under control.
"I do worry about bringing the Fed into what is really a pretty toxic political environment and undermining confidence in the Fed," Kohn said Thursday in a CNBC interview.
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