Kevin Hassett, the head of Trump's Council of Economic Advisers, said the president is expressing his views on monetary policy, but he isn't trying to "politicize" the Fed. Which makes it not easy to see the current selloff lasting very long - if indeed Fed fear is behind it. Three have PhDs in economics and three have law degrees.
Trump said Tuesday that the economy is enjoying "record-setting" numbers and "I don't want to slow it down even a little bit, especially when we don't have the problem of inflation". And the time-honored tradition of hanging the stock market's performance over the neck of the president isn't likely to go away any time soon.
"When you talk about economies, our economy is far better than that". Keeping interest rates low too long risks stoking inflation, which could wreak a kind of havoc the markets haven't seen for decades.
"They're being too aggressive", Trump said.
Further interest-rate increases are "not unreasonable" given the strength of the expansion, said James Knightley, chief worldwide economist at ING Groep NV in London. It is often tied to higher costs of borrowing for the federal government, which can spook investors.
Interest rates are rising.
Powell and Trump haven't personally discussed the matter, the Fed chair has said, but Trump's rhetoric has alarmed some Democrats and Republicans on Capitol Hill. They have reached out to the Fed leader to ensure there hasn't been improper political interference. "The Fed is going loco and there's no reason for them to do it and I'm not happy about it". "We just try to do the right thing for the medium- to long-term for the country". He has repeatedly criticized the central bank for raising interest rates this year, decisions aimed at preventing the economy from overheating. Powell defended the Fed's plans to raise interest rates gradually in the coming months, saying it was appropriate policy in such "extraordinary" economic times.
Trump has said in the past that he was "not thrilled" with the rate hikes and reportedly told donors at a fundraiser that Fed Chairman Jerome Powell had not been the "cheap money" banker he hoped for. "That doesn't seem especially surprising". President Jimmy Carter in 1979 removed G. William Miller as Fed chairman by offering him the job of Treasury secretary.
"I think the Fed has gone insane", Trump said.
It was his second broadside against the U.S. central bank in the last 24 hours, following a sell-off on Wall Street partly attributed to investors fully adjusting to the central bank's steady rate increases, and an uptick in particular in yields on long-term U.S. Treasury bonds that are an important, more secure alternative to stock investments. While he was generally upbeat about the U.S. economy, predicting that the good news could continue "effectively indefinitely", when asked on October 3, 2018, what keeps him up at night, Powell said, "Basically everything". "Where is the inflation that they are fighting?"
There's nothing like watching the stock market take a trillion-dollar one-day loss to get your attention. Economic growth has improved, and Republicans have taken steps to cut taxes and regulations.
But in an interview with CNN in Bali, Mnuchin appeared to contradict Trump's suggestion that the Fed was partly to blame.
Meanwhile, yields in Europe remain suppressed: the European Central Bank is planning to stop its bond-buying program by the end of this year, but it's not going to start unwinding its $3.8-trillion bond holdings anytime soon. "The problem in my opinion is the Fed, " he added.