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WASHINGTON – The official statement from the US Federal Reserve on Wednesday about its last political meeting does not mention any discussion of President Trump's demands that the Fed should stop raising interest rates.
But it is clear that Mr. Trump's economic policies are in the Fed's mind.
The strength of economic growth, due in part to the tax cuts that Mr Trump had supported last year, is prompting Fed officials to consider preventing the overheating of the economy. economy for the first time since the 2008 financial crisis, according to the minutes of the September meeting. meeting of the Federal Open Market Committee.
The Fed could raise its benchmark interest rate to a slightly restrictive level, above 3%, by the second half of 2019.
But the Fed remains uncertain about its plans for the coming year, not least because its officials are also worried that Trump's trade policy is slowing economic growth, the report said.
The general tone of the Fed remains bright and sunny. The economy is in the tenth year of one of the longest expansions in US history, and officials expect the good times to continue.
The Fed said the end result was that the economy was evolving pretty much as expected.
Mr. Trump recently seized the opportunity to launch verbal jousts against the Fed. More recently on Tuesday, he told Fox Business he was considering the central bank's move towards higher interest rates as "my biggest threat."
Mr Trump is complaining that the Fed is "raising rates too quickly" despite the low level of inflation.
Trump said he did not speak directly to Fed Chairman Jerome Powell about his concerns, adding, "I'm not happy with what he's doing because it's going too fast. "
Mr. Powell, for his part, refused to respond directly to the criticism of the President. At a press conference held last month, he said the Fed would make its decisions based on economic data.
The economic data are good. Tax cuts have increased spending by consumers and businesses; Some officials have cited evidence of increased business investment, the report said.
Fed officials are paid to worry about potential economic problems and the minutes include a familiar list: Increased trade disruptions could weigh on growth; slowing economic growth in the rest of the world could weigh on the United States; a shortage of workers could start to increase inflation.
According to the minutes of the meeting, some companies told the Fed that "uncertainty about trade policy" played a role in the decision to "give up production or investment opportunities". In particular, the minutes stated that "tariffs on aluminum and steel were quoted energy sector."
Powell said the Fed did not see evidence that Trump's trade policies had reduced overall measures of economic growth, although it may be too soon to see such an effect.
Minutes indicated that these risks were approximately offset by the potential for faster economic growth.
A quarter point increase at the December meeting would leave the Fed's benchmark rate at about half a point below the Fed's 3% level, which means that interest would neither stimulate nor discourage economic growth.
Most Fed officials are expecting to raise their rates at least three times next year. This could push the reference rate into restrictive territory by the autumn of 2019. According to the minutes, officials favoring such actions felt that it might be necessary "to reduce the risk of a persistent overrun of the 2% target set by the committee with regard to inflation or the risk that represent significant financial problems. " imbalances. "
The move to a restrictive territory has drawn not only the complaints of Mr. Trump, but also liberal economists and advocates who say the Fed should allow continued economic growth to attract more people to the labor market and allow increases higher wages.
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