Federal Reserve unanimously backed higher interest rates, despite Trump

Federal Reserve unanimously backed higher interest rates, despite Trump

Federal Reserve unanimously backed higher interest rates, despite Trump

The release of the minutes from the Fed's September policy meeting is due at 1800 GMT, Wednesday.

This is because markets tend to "buy the rumour and sell the fact", which means that once an end to the Federal Reserve's rate hiking cycle is just around the corner, traders would be most likely to dump the Dollar anyway.

The more the so-called long-term growth potential of the economy increases, "the more gradual we can be in our removal of monetary policy accommodation", he said in the speech.

US President Donald Trump heaped more criticism on the Federal Reserve in an interview with Fox Business Network yesterday, extending his discontent beyond its chairman, Jerome Powell, whom he has frequently critiqued in public.

The recent increase in interest rates has spooked investors who fear higher borrowing costs could slow down the economy.

Mr. Quarles likened central bankers to pilots looking at an airplane control panel when navigation instruments weren't as sophisticated as they are today. Recession risks are low, he said, adding "all the indicators now are for a strong economy for a significant period into the future".

In prepared remarks for an appearance at the Economic Club of Memphis, Bullard laid out a new version of the argument by introducing an updated version of a standard monetary policy "Taylor Rule" that accounts for both the modern drift down in market interest rates, weak current inflation, and weak expectations among investors about future inflation.

"You are well positioned if the shot comes to your right or to your left", Williams told reporters there. At the same time the U.S. borrowing rate has doubled in just 2 years and someday we will have to balance our ballooning budget as we continue to dump our fiscal burden on the next generations. Unemployment is near a 49-year low.

NO: The Fed rate is a principal tool in its toolbox to manage the economy in the event of excessive inflation, bank failure or recession. "Because you looked at the last inflation numbers - they are very low".

"All participants expressed the view that it would be appropriate for the committee to continue its gradual approach to policy firming by raising the target range for the federal funds rate", according to the minutes.

Even the possibility of a headwind to economic growth, however, has provoked Trump into a series of attacks on the Fed and Powell.

The president has vehemently expressed his displeasure on multiple occasions. This would move United States interest rates slightly above what policymakers say is "neutral" - that is, neither slowing nor speeding the economy - but some participants said the Fed would need to go even further than that.

Under Powell, the Fed has been gradually raising rates as the economy has strengthened as a way to prevent a run-up in inflation. As other Fed governors retire, the president has the opportunity to fill more spots.

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