As reported by Reuters, US President Donald Trump’s comments that Fed rate hikes threaten growth of the US economy are looking to have little impact on the US Federal Reserve, and there was no sign of acknowledgement of the president’s remarks in the latest Fed meeting.
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“The 273-word policy statement from the Fed’s rate-setting committee was unanimously agreed by its eight members, including two Trump appointees, Chairman Jerome Powell and Randal Quarles, the central bank’s vice chair for supervision. Wednesday’s statement described the economy as “strong,” using language that was largely unchanged from the Fed’s policy statement in June. Trump blasted the central bank for raising rates in a July 19 interview with CNBC.
The Fed’s upbeat assessment keeps it on track to lift borrowing costs at its next meeting in September. Investors now see a 90 percent probability the Fed will raise rates in September and see a further hike in December, according to an analysis of Fed funds futures contracts compiled by the CME Group.
“I don’t know if Trump did himself any favors whining about the Fed hiking interest rates. The reality is that the Fed is doing the right thing,” said Phil Orlando, chief equity strategist at Federated Investors in New York.
Trump, while stressing that his comments were those of a private person, broke with the tradition that presidents do not comment on Fed policy when he told CNBC that “all of this work we are putting into the economy” risked being undermined by the Fed’s push for higher rates.
His comments drew charges that he was seeking to influence monetary policy for political gain as President Richard Nixon did when he pressured the Fed to delay raising rates beyond the 1972 elections.
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