Sunday , January 24 2021

Donald Trump deals with Fed's burning after rising interest rates – 12/22/2018



US President, Donald TrumpEstimates the Opportunity to Release Federal Reserve (Fed, Central Bank) President Jerome Powell After Agency to raise rates this week interested, announced this Saturday CNN, which refers to two things.

CNN assures it Trump is "furious" with the Fed and has asked his advisers for advice on the possibility of expelling Powell, especially whether can legally leave most of the responsibility for US monetary policy.

Trump chose Powell as president of the Fed and started working February this year four years.

US President Jerome Powell did not pay attention to President Donald Trump. Photo: Reuters

US President Jerome Powell did not pay attention to President Donald Trump. Photo: Reuters

This week, the Fed unanimously decided to raise quarterly rates so that the price of money in the United States was 2.25 to 2.50%, which means that levels not seen for more than ten years in the first world economy.

The Central Bank of North America introduced this measure ignored Trump, who had asked Fed not to make a "new mistake" with the rise in interest rates.

The Chairman has repeatedly complained that the gradual monetary change promoted by the Powell Agency threat to the US economy.

Presidential criticism of the community they violate the traditional respect for independence Monetary Policy from the White House and have surprised the market and analysts.

Powell, in turn, avoided the answer of the President and emphasized that the good economic situation of the country, where the unemployment rate is 3.7 percent, is close to the minimum level and inflation close to the annual target for half a century. 2%.

However, in recent months, Wall Street has shown signs of weakness, and its main indicator, Dow Jones, has fallen by 12 percent since October.

Last Wednesday, the Fed raised interest rates by 0.25 percentage points – fourth in the year – and placed it at 2.25-2.5%, which economists almost for granted. However, he warned that in the future he will be cautious because next year basically I'll just send them twice.

Since June 2015, the central bank has increased its main exchange rate eight times, reaching almost 2.50% after almost eight years. to leave the great recession in 2008-2009. This policy cost and the economy recovered. In fact, it is now growing at 3.5% per annum, while unemployment has fallen to a historical level of 3.7% and consumption is booming. The Fed then began to raise prices in the long term to prevent overheating of the economy and to raise inflation by more than 2% per year.

However, in recent months, the United States, however, faces potential problems from the possible effects of the Trump trade wars on China's slowing down and the turbulence caused by the divorce between Britain and the European Union (Brexit). Several signs suggest that US economic growth would have reached its peak. This perception shook the market in recent weeks and Wall Street lost over the year.


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