Published: Sun, October 14, 2018
Business | By Eloise Houston

Mnuchin: Trump respects Fed but likes low interest rates

Mnuchin: Trump respects Fed but likes low interest rates

"I think the Fed has gone insane", he said.

"The Fed is making a mistake", he told reporters on Wednesday as he arrived in Pennsylvania for a campaign rally. "They're so tight. I think the Fed has gone insane", Trump said.

But he downplayed the first major drop in months, saying, "it's a correction that we've been waiting for a long time".

The Dow Jones dropped by more than 800 points on Wednesday in one of the worst days for the stock market since February, and President Donald Trump had an explanation ready when asked by reporters.

Mnuchin said in the discussions he had with the Chinese they had made clear that they did not see a further weakening of the Chinese yuan as being in their interests. "And we have interest rates going up at a clip that's much faster than certainly a lot of people, including myself, would have anticipated", the US President said.

Global stock markets fell again on Thursday as investors anxious about signs of slowing growth, rising trade tensions and higher interest rates.

"Of the many qualities of Jerome Powell is he's an individual who really understands the plumbing of the United States and the global financial system", Carney said.

Mr. Williams nodded toward some of the global concerns about the spillover effects of Fed rate rises by noting that the central bank has a domestic mandate, while adding it does very much take on board how its policies affect other nations.

Trump, who departed for Erie just before markets closed on Wednesday, was briefed by officials about the sell-off.

"In the absence of a specific trigger, investors are now voting with their feet due to mounting concerns around trade tensions and the impact on global growth, higher interest rates in the US, and a potential rotation away from equities due to rising bond yields", said Richard Hunter, head of markets at Interactive Investor. "And I think that is why you're down 600 and some odd points, too".

When you see things like this happening - stocks tanking, long-term interest rates rising rapidly, various supposed experts holding forth - it's tempting to run around, shriek and react to what's going on right now. "He knows the Fed is independent and he respects that".

Trump, however, pointed to the Federal Reserve System's recent decisions to raise interest rates as the more likely culprit. "Today they went down to those testing areas and failed", Cashin said.

During a PBS interview last week, Fed Chair Jerome Powell said accommodative interest rates, or low rates to encourage economic growth, were no longer needed.

Fed officials last month raised its key short-term rate for the third time this year, and a fourth hike is likely before year's end.

Can Fed Policy Cause Sudden Stock Market Crashes?

He said the U.S. meant to include the language used in the recently concluded deal with Canada and Mexico, which prohibits the competitive devaluation of exchange rates, would be used in future trade agreements. Using target-date funds as a benchmark, Thompson said a person at age 25 might have a fund that's about 10 percent bond funds and the rest in a mix of equities - a more growth-oriented portfolio. "I like to stay uninvolved", Trump said.

And while he acknowledged higher rates helped savers, he criticized the Federal Reserve's tactics as 'too aggressive'.

Fed named Powell to lead the central bank but can only fire him for cause.

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