Trump claims Fed rate hikes hinder USA economy

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On Twitter, Trump also accused China and the European Union of manipulating their currencies to promote their exports at the expense of the USA, and criticised the Fed for raising interest rates.

US President Donald Trump says he is ready to impose tariffs on all $US500 billion ($673.7 billion) of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.

In a taped interview with the business channel CNBC aired early Friday, Trump said "I'm willing to go to 500", referring roughly to the $505.5 billion in goods imported previous year from China.

He said the American Federal Reserve's course of tightening monetary policy "now hurts all that we have done".

Those comments, plus Trump's criticism of Federal Reserve interest rate hikes, caused the dollar to fall back against other currencies, however, including the pound which rebounded from 10-month lows versus the greenback. So the Fed's rate hikes have lit a fire under the US dollar, something which tends to widen the country's trade deficit as foreign countries with weaker currencies become much cheaper to import from. Rather, he may be prepared to wait as long as he feels it necessary to force other countries to adopt trade rules more favorable to the United States.

Mr Trump also criticised previous USA administrations for not standing up to China, claiming that unspecified Chinese officials told him "nobody would ever complain until you came along - me".

"Given what we know about Powell, we see little chance the President has gotten in his head", Feroli wrote in a note to clients. "If a decision is a close call, then the appearance of kowtowing to the president may bias them toward raising rates".

"Instead of making their exports better, they make them cheaper", The Balance says.

In excerpts of an interview with United States television network CNBC aired Thursday, Trump said a strong dollar "puts us at a disadvantage", adding that the Chinese yuan "has been dropping like a rock".

"I'm not thrilled", Trump said, adding "Because we go up and every time you go up they want to raise rates again".

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The Fed has hiked interest rates twice this year and could jack the rate up twice more before year's end.

"People are underestimating what we're headed for", said Rod Hunter, a lawyer who served as a White House economic adviser under President George W. Bush.

When asked about the stock market possibly falling if the USA imposed duties on such a large amount of goods, Mr Trump told CNBC: "If it does, it does".

Despite this, Trump said that the Fed should keep rates low so the USA economy could make up lost ground to China.

"We are being taken advantage of and I don't like it", the president said in a taped interview that aired today.

Trump defended his comments to CNBC by saying he is "just saying the same thing that I would have said as a private citizen".

It turns out President Bill Clinton didn't want to speak about the Fed's decisions as a tactic to avoid looking vulnerable.

"Our currency is going up", Trump said.

"They literally have the President of the United States trying to jawbone currencies and put pressure on the Fed to keep the currency weak. Why?"