Fed's current policy path would boost recession risk -Bullard

Fed's current policy path would boost recession risk -Bullard

Every Federal Reserve policymaker backed raising interest rates last month in a meeting where they also generally agreed borrowing costs were set to rise further, according to minutes from the meeting released on Wednesday.

In the Treasuries market, the 10-year yield was little changed after earlier rising to a one-week high as the equities sell-off offset worries about the number of upcoming interest rate increases from the Fed.

"My biggest threat is the Fed, because the Fed is raising rates too fast", Trump said.

Last week, Trump criticized the U.S. central bank twice, saying it was raising interest rates so swiftly that it threatened the country's economic health.

Trump made his comments Tuesday in an interview with Fox Business Network's Trish Regan.

Trump has broken with standard presidential practice by openly commenting on rate hikes, most recently on Tuesday, when he told Fox Business News: "My biggest threat is the Fed".

"This gradual approach would balance the risk of tightening monetary policy too quickly, which could lead to an abrupt slowing in the economy and inflation moving below the Committee's objective, against the risk of moving too slowly, which could engender inflation persistently above the objective and possibly contribute to a buildup of financial imbalances", the minutes said.

Trump has railed against the Fed repeatedly in recent weeks, saying the central bank "has gone crazy" and calling its interest-rate hikes "loco."

Trump has said he is not trying to oust Powell, who he appointed to replace former Chair Janet Yellen.

Bullard is not now a voting member of the Fed's rate-setting committee, but he will join that group in 2019. The Fed has always been seen as needing to remain free of political pressure to properly manage rates, and presidents have generally respected that independence, especially publicly.

"The fact that they refrained from labeling China a currency manipulator is a positive development, especially from the point of view of emerging market currencies", said Attrill.

"I'm not happy with what he's doing", Trump said of Powell.

Quarles, in addition to Richard Clarida, are the two current members of the board to have been nominated by Trump. "The Fed is going to try to demonstrate that it's totally independent and it's not going to react to that".

Trump's latest attack on the Fed follows a similar criticism last week, when he told reporters, "The Fed is going wild". Markets fear currency crises in Turkey and Argentina and other emerging market economies could spread beyond their borders - something that could be sparked as investors pull out to take advantage of higher rates in the United States.

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