Trump calls the loco & # 39; Federal Reserve & # 39; too aggressive & # 39;

WASHINGTON (Reuters) – US President Donald Trump on Thursday launched a second day of criticism against the US Federal Reserve, calling his interest rate increases "ridiculous," which made it more costly for his administration to its growing deficits.

"I pay interest at a high rate because of our Fed. And I would like our Fed not to be so aggressive because I think it's a big mistake, "Trump said in an interview with Fox & Friends on Thursday morning.

This was his second attack on the US central bank over the last 24 hours, following a massive sell-off on Wall Street, partly because of investors' total adjustment to the steady rise in policy rates. central bank, and a sharp rise in US long-term bond yields. Treasury bills are an important and more secure alternative to equity investments.

President of the National Economic Council, Larry Kudlow, quickly qualified the president, saying the Fed was "in the spotlight" in its policies to respond to the strength of the economy.

Rising interest rates are "a sign of economic health, it's not to be feared," Kudlow told CNBC. "The president does not dictate policy to the Fed … They are independent. They will do what they will do. "

Trump himself later told reporters that he would not seek to oust Powell, the successor chosen by the hand of former Fed President Janet Yellen, and a well-regarded insider in moderate Republican circles. He took office just eight months ago, largely pursuing the policies implemented by Yellen.

Former US presidents have criticized the central bank, but the recent series of invectives was unusual, even for Trump. Since the closing of the trading session Wednesday on Wall Street, he called the Fed "crazy", "loco", "ridiculous" and "too cute", while claiming that its rate hikes are "too aggressive" and "a big mistake." US stocks opened lower on Thursday, but ranged between one percentage point losses and modest gains.

Although the Fed has raised its overnight target interest rate, a benchmark for all credit costs, the current level of between 2% and 2.25% is only half of the average set by the Fed. Fed between 1990 and the beginning of the recession from 2007 to 2009.

"The problem I have is with the Fed. The Fed is unleashed. I mean, I do not know what their problem is, but they are raising interest rates and that's ridiculous, "Trump said Wednesday night. "The problem, in my opinion, is the treasure and the Fed. The Fed is going loco and there is no reason for it to do it and it does not make me happy. "

A Fed official said the central bank would not comment on the president's remarks.

World economic leaders, including Christine Lagarde, head of the International Monetary Fund, took the defense of the Fed, stressing that the independence of monetary policy vis-à-vis the influence of elected officials had become a touchstone of effective economic governance and that it prevented politicians from using cheap money to promote their own interests [nL4N1WR3EY].

At Bali's IMF meetings, Lagarde said she "would not associate" Fed chairman Jerome Powell "to insanity".

The Fed raised interest rates last month and is expected to do so again in December. Fed officials, including Powell, Trump's hand-tripped president, have stated specifically that they would not be influenced by the comments of elected representatives and that they would make decisions based on of economic data.

Until now, this has been enough to justify regular rate increases, sign of the Fed of an economy that has recovered more since the financial crisis of 2007-2009. At just over 2%, the Fed's short-term policy rate remains low by historical standards, and most borrowing cost and credit flow indices still consider broad financial terms as "relaxed" and conducive to economic growth.

The yield on the 10-year US Treasury Note rose from about 2.1% to about 3.1% last year.

The gradual rate hike, according to Fed officials, aims to prevent any rapid acceleration of inflation, while remaining low enough for the recovery and strong job growth to continue.

The policy could ultimately more strongly attack sectors of the economy that are both interest-rate sensitive and linked to important political sectors, such as the automobile and the economy. the construction and sale of houses.