Dollar dented by Trump's Fed comments

Trump criticized Powell Fed rate hikes at GOP fundraiser reports

Most analysts think that Trump's criticism will have little effect on the Fed's rate-hike plans, given the USA central bank's legal independence.

The US Dollar has weakened only modestly Wednesday despite news that two of US President Donald Trump's former advisers are facing lengthy prison sentences but its losses could well accelerate despite the currency's status as a safe haven at times of risk aversion.

There are a total of seven governors on the Fed Board, all of whom have a vote on setting interest rates, and Trump still has one remaining vacancy to fill should his current slate of nominees win approval from the Senate.

President Donald Trump continued to blast the Federal Reserve's recent interest rate hikes in an interview Monday, days after complaining about Federal Reserve Chairman at a private GOP fundraiser.

Asked on Monday if he believed in the Fed's independence, Trump said: "I believe in the Fed doing what's good for the country".

"While Trump's displeasure for rising interest rates is nothing new, and the Fed maintains full operational independence, markets remain attentive to such comments", wrote strategists at ANZ. Trump said to Reuters about Powell. Led by Jerome Powell, a Trump appointee who took over the chairmanship in February, policy makers are gradually raising rates. There were about 60 guests at the event, including Jared Kushner, John Catsimatidis and his son, Chicago Cubs co-owner Todd Ricketts and Treasury Secretary Steven Mnuchin. The benchmark rate is now in a range of 1.75 per cent to 2 per cent, and the Fed has indicated it is likely to hikes rates two more times before the end of the year. Numerous members considered another rate hike likely appropriate soon. Trump followed up those comments with further complaints on Twitter.

Without gradual rate interest rate rises, policymakers worry, the economy could overheat, forcing the Fed to raise them aggressively and possibly sending the United States into recession.

Presidents have historically avoided commenting on Fed policies. Economists said the pressure helped create the stagflationary economy of the 1970s.

But that stands in contrast with the president's own words, which are often very critical of Powell and suggest the Fed should be moving in a different direction. According to Board of Governor's meeting records released after each of these increases, Powell was fully in support of the policy put in place by Yellin back in December 2015 and that he has been a strong advocate for the modest interest rate increases that have taken place since he took office earlier this year.

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