Trump claims Fed rate hikes hinder United States economy

Galtero Lara
Julio 20, 2018

Stock markets in Europe have fallen sharply after President Trump said he was willing to impose tariffs on all Chinese goods imported to America.

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

"I'm not doing this for politics, I'm doing this to do the right thing for our country", Trump said. "We have been ripped off by China for a long time", he said. Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports and China promptly levied taxes on the same value of USA products.

Trump is taking a more aggressive, protectionist posture on trade than his recent predecessors, sparking retaliatory measures from countries around the world and igniting disputes on multiple fronts.

President Trump took a pot shot Thursday at the Federal Reserve for eyeing another interest rate hike that could slow America's strong economic growth.

Trump said he was only expressing his opinion as a private citizen by criticizing the move to raise interest rates.

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Responding to the president's latest comments, the White House economic adviser Larry Kudlow told the news website Axios that provoking Trump would be a mistake for China.

Trump argued the Fed's rate hikes went against "all of the work that goes into doing what we're doing". "But at the same time I'm letting them do what they feel is best", he said.

He added, "No one in the administration has said anything to me that really gives me concern on this front".

U.S. President Donald Trump addresses a cabinet meeting as his daughter senior advisor Ivanka Trump listens in the Cabinet Room of the White House in Washington, U.S., July 18, 2018.

Trump admitted his comments were unusual but said he doesn't care, CNBC reported. "As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions". The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and to prevent the economy from overheating. The probability investors assigned to a Fed rate hike in September was little changed near 90 percent after the president's remarks, while the probability of a December hike was also holding near 65 percent, according to trading in federal funds futures. But rate increases also make borrowing costlier for households and companies and can weaken the pace of growth.

Trump's rebuke broke with more than two decades of White House tradition of avoiding comments on monetary policy out of respect for the independence of the United States central bank.

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