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Trump says US central bank has ‘gone crazy’ with interest rate hikes

Muslim Times(Web Desk) – US President Donald Trump has again criticized the Federal Reserve, saying the country’s central bank has gone “crazy” and is rushing to raise interest rates when inflation is minimal.

“Actually it’s a correction that we’ve been waiting for a long time, but I really disagree with what the Fed is doing,” Trump told reporters Tuesday on the White House lawn.

“I think the Fed has gone crazy,” Trump said.

The US Federal Reserve, the nation’s central banking system, last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the US economy would experience at least three more years of economic growth.

The Federal Reserve is mandated by Congress to aim for low inflation and low unemployment. Currently American consumer price inflation is above 2 percent annually and the unemployment rate is the lowest in about 40 years.

Trump’s comments follow a volatile day of trading in the US stock markets. At market close on Wednesday, the Dow Jones lost 3.15 percent, and the S&P 500 fell 3.29 percent.

Experts attribute at least some of the decline to the recent rapid rise in Treasury yields, the interest rate that the US government pays to borrow money for different lengths of time.

Trump has publicly stated his concerns before about the Federal Reserve.

Just a day earlier, Trump said he did not like the Fed’s path on monetary policy, criticizing the central bank for moving too quickly with interest rate increases.

“I think we don’t have to go as fast,” Trump reportedly said. “I like low interest rates.”

In September, the Fed raised interest rates by 25 basis points for the third time in 2018, raising the target range for its benchmark rate to 2 – 2.25 percent.

At the time, Trump bashed the rate hike, adding that he would “rather pay down debt or do other things.”

The US Federal Reserve is considered independent because its monetary policy decisions do not have to be approved by the president or anyone else in the executive or legislative branches of government and it does not receive funding appropriated by the Congress.

Fed Chair Jerome Powell has long maintained that the central bank needs to remain independent from political pressure in order to see its dual mandate through.

“We must not forget the lessons of the past, when a lack of central bank independence led to episodes of runaway inflation and subsequent economic contractions,” Powell said at a central banking conference in May.

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