U.S. President Donald Trump on Thursday cast aside concerns about the Federal Reserve香蕉视频直播檚 independence, saying he was 香蕉视频直播渘ot happy香蕉视频直播� with the Fed香蕉视频直播檚 recent interest rate increases.
Trump told CNBC in an interview: 香蕉视频直播淚 don香蕉视频直播檛 like all of this work that we香蕉视频直播檙e putting into the economy and then I see rates going up.香蕉视频直播�
Last month, the Fed raised its benchmark rate for a second time this year and projected two more increases in 2018. Its rate hikes are meant to prevent the economy from overheating and igniting high inflation. But rate increases also make borrowing costlier for households and companies and can weaken the pace of growth. In particular, the Fed香蕉视频直播檚 most recent rate hikes could dilute some of the benefit of the tax cuts Trump signed into law last year.
The president acknowledged that his comments about the Fed would likely raise concerns. The central bank has long been seen as needing to operate free of political pressure from the White House or elsewhere to properly manage interest rate policy.
The Fed香蕉视频直播檚 dual mandate is to maximize employment and stabilize prices. By maintaining its independence, the central bank can make politically contentious decisions to combat economic challenges, like the huge bond purchases it made after the 2008 financial crisis to help drive down long-term rates to support the economy. That policy drew rebukes from many Republican lawmakers.
In February, Jerome Powell, Trump香蕉视频直播檚 hand-picked choice, became Fed chairman. Last week, Powell said in an interview with the radio program Marketplacethat he didn香蕉视频直播檛 expect to face pressure from the White House.
香蕉视频直播淲e have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns,香蕉视频直播� Powell said. 香蕉视频直播淲e do our work in a strictly nonpolitical way, based on detailed analysis, which we put on the record transparently.香蕉视频直播�
He added, 香蕉视频直播淣o one in the administration has said anything to me that really gives me concern on this front.香蕉视频直播�
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The reaction to Trump香蕉视频直播檚 remarks in the financial markets was muted. The U.S. dollar fell to 112.46 yen from 112.84 yen earlier, and yields on Treasurys dipped slightly.
After Trump香蕉视频直播檚 interview with CNBC was made public, Lindsay Walters, a White House spokeswoman, said the president 香蕉视频直播渞espects the independence of the Fed.香蕉视频直播�
香蕉视频直播淭he president香蕉视频直播檚 views on interest rates are well-known, and his comments today are a reiteration of those long held positions, and public comments,香蕉视频直播� Walters said.
Speaking about Fed policy in his interview with CNBC, Trump said he is 香蕉视频直播渓etting them do what they feel is best.香蕉视频直播�
But his comments raised alarms, including with some former Fed officials who saw in his remarks a possible effort to apply public pressure on the central bank.
香蕉视频直播淚 am not pleased,香蕉视频直播� said Carl Tannenbaum, a former Chicago Fed official and chief economist at Northern Trust. 香蕉视频直播淭he remarks certainly aren香蕉视频直播檛 an immediate threat to Fed independence, but they break with the tradition of respectful distance.香蕉视频直播�
Randall Kroszner, a former Fed governor, said the central bank has withstood political pressure before and will continue to do so under Powell香蕉视频直播檚 leadership.
香蕉视频直播淭he Fed has often faced political pressures 香蕉视频直播� from Congress, presidents, Treasury secretaries and innumerable outside groups,香蕉视频直播� said Kroszner, an economics professor at the University of Chicago. 香蕉视频直播淢y experience at the Fed is consistent with what Jay Powell recently said 香蕉视频直播� being non-political is deep in the Fed香蕉视频直播檚 DNA 香蕉视频直播� and I believe that Jay will keep it that way.香蕉视频直播�
During the 2016 presidential campaign, Trump was highly critical of the Fed and accused its policymakers of keeping rates at ultra-low levels to favour Democrats. But he also told CNBC during the campaign that he is a 香蕉视频直播渓ow interest-rate-person.香蕉视频直播�
Past efforts to apply political pressure on the Fed have sometimes hurt the economy. President Richard Nixon encouraged Arthur Burns, the Fed chairman at the time, to help boost economic growth ahead of Nixon香蕉视频直播檚 1972 landslide re-election. That episode ultimately triggered runaway inflation that took a decade to tame and required raising the Fed香蕉视频直播檚 policy rate above 15 per cent 香蕉视频直播� more than eight times the rate香蕉视频直播檚 current average.
George H.W. Bush香蕉视频直播檚 administration complained that he felt the Fed香蕉视频直播檚 failure to cut rates more quickly in 1992 contributed to his re-election defeat that year.
When Robert Rubin led President Bill Clinton香蕉视频直播檚 National Economic Council, he adopted a rule of never commenting on the Fed香蕉视频直播檚 actions 香蕉视频直播� a policy that was subsequently followed by the George W. Bush and Obama administrations.
The Associated Press
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