I don't like Fed raising interest rates so quickly, says Trump

Andrew Cummings
October 11, 2018

The Federal Reserve can likely stop raising U.S. interest rates once they reach about 3 per cent, as long as inflation remains around 2 per cent and the economy is doing well, Chicago Federal Reserve President Charles Evans suggested on Wednesday.

Ahead of a campaign rally for the USA mid-term elections next month, Trump told reporters: "I think the Fed is making a mistake".

He adds, "I think the Fed has gone insane".

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". "But I really disagree with what the fed is doing. OK?"

The US stock market sell-off last night saw the S&P 500 and the Dow marking their biggest daily declines since February 8 with technology stocks at the centre of the falls.


Last week's jump in yields followed strong USA data but many analysts have been anticipating dynamics in the bond market to change due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes.

The Fed last raised interest rates in September and left intact its plans to steadily tighten monetary policy, as it forecast that the United States economy would enjoy at least three more years of economic growth. Many observers expected that would trigger a sell-off in the stock market as investors flooded their cash into Treasurys.

He said he didn't think the current rate of U.S inflation merits higher borrowing costs.

"Well, I like to see low interest rates".

Ivan Feinseth, Chief Investment Officer at Tigress Financial Partners, said that although the sell-off caught him off-guard, he thought many investors were unduly frightened by the prospect of rising rates.


Currency investors took shelter in the safe-haven yen, resulting in steep losses for Japanese exporters, with electronics giant Sony down almost five percent as blue-chip firms flashed red across the trading board.

And while stocks could get a boost from strong corporate earnings, there are concerns the United States trade conflicts will start to undermine profits.

Bourses in Paris and Frankfurt both lost more than two percent, while London fell 1.3 percent.

Trump was briefed on the market turmoil earlier in the day, a White House official said.

"To say risk appetite has taken a hit would be an understatement!" In Paris, shares in Kering fell almost 10 percent, LVMH over seven percent and Hermes around five percent.


In other markets, oil prices fell sharply on worries that Hurricane Michael will dent demand for gasoline and other petroleum products.

Other reports by iNewsToday

FOLLOW OUR NEWSPAPER