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Trump pressures Fed before meeting, warns against 'another mistake'

19 December, 2018, 02:27 | Author: Melinda Barton
  • Paris is burning’ Trump hails US economy while ‘outside world blowing

Many economists also expect additional increases next year although at a slower pace.

The markets are pricing in a 78.4% chance of a rate hike announcement on Wednesday, according to CME futures data, when the Fed wraps up its last two day meeting of the year. That hike would keep rates low by historical standards but put them at the highest level in a decade.

Global stock markets have fallen in anticipation of today's US Federal Reserve meeting which could lead to an interest rate hike. "Given recent economic and market developments, the Fed should cease-for now-its double-barreled blitz of higher interest rates and tighter liquidity".

As the USA economy has recovered, the Fed has been raising the benchmark lending rate gradually since December 2015.

In recent days, Trump tried to take a slightly softer tone, telling Fed Monday leaders to "Take the victory!" of a solidly growing economy with "virtually no inflation" and not ruin all the good by raising interest rates. However, the USA economy grew an annualized 3.5% in the third quarter, unemployment is now at a 50-year low, and inflation is near target.

The president cited the strong USA dollar, steady inflation rate, and slowing growth in China as key factors the central bank considers in determining the course of national monetary policy. Zero interest rates were introduced during the recession.

The Fed's rates help set borrowing costs for various types of loans.

The majority of USA retail investors say the Federal Reserve should stop raising interest rates, according to a survey by Wells Fargo & Co. Powell will speak at a news conference at 2:30 p.m.

The president began criticizing Powell, his appointee, in July after three quarter-point rate increases in a row.

On Tuesday, he urged the Fed to consider a Wall Street Journal editorial that argued for a "prudent pause" in rate hikes.

Trump's combative trade moves against China and other countries have escalated fears that the higher tariffs the United States has imposed and retaliatory tariffs from USA trading partners will depress growth in the United States and other major economies.

However, Mr Trump - who appointed the Fed's chairman Jerome Powell - has repeatedly blamed the central bank for unsettled markets and dismissed analysts who cite other factors, such as rising trade tariffs.

"Of course the President respects the independence of the Fed".



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