Monetary Policy: Trump Fights US Federal Reserve | message

With their interest rate hikes, they are complaining about its economic policy course, tweeted Trump on Friday. "Now shake everything we did." Among other things, Trump had implemented massive tax breaks in the United States, to stimulate the US economy in this way. The Fed's board of directors declined to comment. However, a Fed regional president pointed out that the central bank would not be deterred from its course. It's an unspoken law that US presidents respect the independence of the Fed and do not interfere with monetary policy

On the foreign exchange market, Trump put pressure on the dollar, which had recently increased. The euro has risen from about half a cent to $ 1,1720, the pound has risen just as well at around $ 1.31.

The Fed does not want to be influenced by criticism of its monetary policy. The Federal Reserve Committee of the Federal Reserve's mission is to maintain low and stable inflation and achieve full employment in the US economy, said St. Louis Fed President James Bullard, Glasgow, Kentucky. "Anyone can comment, including the president and other politicians." But it was up to the committee to make the best decisions to achieve those goals.

Trump also expressed dissatisfaction over the strength of the dollar on Twitter on Friday, accusing major trading partners of currency manipulation. "China, the European Union and others have reduced their currencies and interest rates as the United States raises their interest rates and the dollar has become more in stronger these last days ". This will take the United States its big advantage in trading. "As usual."

Trump had already criticized Thursday at the CNBC station the rise in interest rates of the Fed. "I'm not excited," he said. Monetary authorities wanted to raise interest rates after each increase. "I'm not happy about that." He also fears the dollar's disadvantages for the United States. The US presidential office later said that Trump respects the independence of the Fed and does not interfere with its monetary policy. Trump's budget chief, Mick Mulvaney, reiterated this Friday on Fox News. Trump's statements do not seek to influence the Fed's decisions.

EXPERTS: RISK OF INFLUENCE

Experts were concerned that there is a risk that the Fed's decisions will be interpreted as political interference, says Esther Reichelt, an analyst at Commerzbank. "Any hesitation, any signs of slowing interest rates, which we see very well next year, could be interpreted as a sign that the Fed is incorporating the wishes of the president into his decisions." This applies even if the decisions were plausibly justified for economic reasons.

Market analyst Michael Hewson of broker CMC Markets expects the Fed to resist this pressure: "While the comments have raised questions and raised a lot of criticism, he is unlikely to do so.The Fed's rate will slow down. "The president should accept that. UBS Asset Management's chief economist, Paul Donovan, goes one step further: "The Fed should tighten its bonds, as deficit-financed tax cuts in times of high growth are useless." and must be countered. "

The Federal Reserve raises its interest rates since 2015 due to the boom in the economy. After Trump took office in January 2017, there were five stages. The key rate for providing money to banks is currently in the range of 1.75 to 2.0%. It is only Wednesday that Fed Chairman Jerome Powell reiterated that interest rates should continue to increase gradually. Two more elevators are expected at the river for this year.

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