Mubasher: US President Donald Trump continued to take aim at the Federal Reserve’s policy decisions, hinting that it is the reason behind a market drubbing on Wednesday’s trading.
Dissatisfied with the Fed’s policies, President Trump found it unclear why the Fed continued its tightening monetary policy.
“I mean, I don't know what their problem is that they are raising interest rates and it's ridiculous,” Trump told Fox News in a telephone interview late Wednesday.
“The problem [causing the market tumble] in my opinion is Treasury and the Fed,” Trump said, criticising the US central bank as “going loco [Spanish for crazy],” and considering its interest rate policy as unjustifiable.
Trump has expressed before his displeasure with the Fed’s approach, spurring jitters over risk to the central bank’s independence.
That said, US officials have sought to affirm that the president would respect the Fed’s historic ability to make decisions away from political meddling.
“We as an administration absolutely support the independence of the Fed,” US Treasury Secretary Steven Mnuchin said last July.
Moreover, Trump hinted that he understood the importance of keeping a firewall between the White House and the Fed.
However, it seemed that his stance on the Fed changed Wednesday, amid fears that rapidly hiking rates led the Dow Jones Industrial Average to shed over 800 points by the day’s end.
The Federal Reserve raised interest rates three times this year, with widespread expectations of a further hike ahead of the year-end.
The recent rate increase triggered criticism from Trump who was “worried about the fact that they seem to like raising interest rates, we can do other things with the money.”