Mr Trump said increased rates had resulted in a stronger dollar which put the USA at a disadvantage compared with places where central banks are holding interest rates steady. But in the CNBC interview, the president said he was seeking to do only what’s fair.
In the CNBC interview broadcast Friday, Trump reiterated his claim that the United States is “being taken advantage of” on issues including trade policy.
The People’s Bank of China set the Chinese currency’s central parity rate to 0.9 percent weaker against the dollar on Friday.
“I’m not thrilled”, Trump said in his interview with CNBC.
Markets around the world lost ground on the comments. “I want them to do well”, the U.S. president said of China.
Trump also called Powell, who he appointed to succeed Janet Yellen, “a very good man”.
The Fed had no comment. Trump came under fire for his lukewarm support during a news conference with Putin for the finding by USA intelligence agencies that Russian Federation meddled in the 2016 election.
And on Friday morning, Trump tweeted his displeasure about recent decisions by the central bank to raise its benchmark interest rate target, bringing his public disagreements with Fed action into a second day. But rate increases also make borrowing costlier for households and companies and can weaken the pace of growth.
Powell, perhaps wary of provoking the ire of the president, has also been particularly careful in press conferences and congressional testimony when asked to comment on Trump’s tax and trade policies. “The markets are very risk-off; there is a loss of confidence right now”. On July 20, Trump said that he thought the Federal Reserve raising interest rates undermined the economy.
It turns out President Bill Clinton didn’t want to speak about the Fed’s decisions as a tactic to avoid looking vulnerable.
“If the market starts to feel the Fed is being manipulated politically, that’s a really bad story”.
“The Fed should be independent but that independence does not mean that is an institution outside of the government of the United States”, said Mark Grant, managing director at money managing firm B. Riley FBR Inc. Is a currency war coming? Trump’s outburst, though, comes at a time when the economy is “in a really good place”, according to Powell. I couldn’t care less what they say, because my views haven’t changed.
The dollar relinquished gains from earlier in the day and Treasury yields dropped following the president’s remarks.
“Uncertainty over the White House’s dollar policy will certainly sow renewed seeds of doubt into global investors”, Viraj Patel, foreign exchange strategist at ING, wrote in a report.
But current and former Fed officials didn’t sound overly concerned about the commander-in-chief’s perspective.
Powell has said he believes the economy is strong enough for the Fed to continue normalizing rates, which were held at a historically low level during the recovery.
Trump has further reshaped the Fed’s leadership by appointing its vice chair for regulation and nominating two more Fed governors, both mainstream economists.