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New York - Trump Calls 'Loco' Federal Reserve 'Too Aggressive'

Published on: October 11, 2018 09:34 AM
Last updated on: October 11, 2018 10:13 AM
By: Reuters 
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Trader {eter Tuchman works on the floor of the New York Stock Exchange, Wednesday, Oct. 10, 2018. APTrader {eter Tuchman works on the floor of the New York Stock Exchange, Wednesday, Oct. 10, 2018. AP

New York - U.S. President Donald Trump launched a second day of criticism against the Federal Reserve on Thursday, calling its interest rate increases a “ridiculous” policy that was making it more expensive for his administration to finance its escalating deficits.

“I’m paying interest at a high rate because of our Fed. And I’d like our Fed not to be so aggressive because I think they’re making a big mistake,” Trump said in a Thursday morning interview on Fox & Friends.

It was his second broadside against the U.S. central bank in the last 24 hours, following a sell-off on Wall Street partly attributed to investors fully adjusting to the central bank’s steady rate increases, and an uptick in particular in yields on long-term U.S. Treasury bonds that are an important, more secure alternative to stock investments.

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Past presidents have criticized their central bankers, but this was an unusual run of invective even for Trump. Since the close of Wednesday’s trading session on Wall Street he has called the Fed “crazy,” “loco,” “ridiculous,” and “too cute,” while saying its rate increases are “too aggressive,” and “a big mistake.” U.S. stocks opened lower on Thursday.

“The problem that I have is with the Fed. The Fed is going wild. I mean I don’t know what their problem is but they are raising interest rates and it’s ridiculous,” Trump said late Wednesday night. “The problem in my opinion is Treasuries and the Fed. The Fed is going loco and there is no reason for them to do it and I’m not happy about it.”

A Fed official said the central bank would not comment on the president’s remarks.

Global economic leaders including International Monetary Fund head Christine Lagarde came to the Fed’s defense, noting that the independence of monetary policy from the influence of elected officials has become a touchstone of effective economic governance, and helps prevent politicians from using cheap money to further their own interests.

At IMF meetings in Bali, Lagarde said she “would not associate” Fed chair Jerome Powell “with craziness.”

The Fed raised interest rates last month, and is expected to do so again in December. Fed officials including Powell, Trump’s handpicked chair, have said pointedly that they will not be influenced by comments from elected officials, and will make decisions based on economic data.

That has so far been strong enough to warrant steady rate hikes, a sign from the Fed’s perspective of an economy that has recovered more completely from the 2007 to 2009 financial crisis. At just over 2 percent, the Fed’s short-term policy rate remains low by historic standards, and most indexes of borrowing costs and credit flows still regard broader financial conditions as “loose” and conducive to economic growth.

The yield on the 10-year U.S. Treasury note has risen to around 3.1 percent from around 2.1 percent over the past year.

The gradually rising rates, Fed officials say, are meant to guard against any quick run-up in inflation, while remaining low enough so far for the recovery and a strong run of job growth to continue.

The policy could eventually bite harder into parts of the economy that are both sensitive to interest rates and connected to politically important industries, such as autos and home construction and sales.



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Read Comments (11)  —  Post Yours »

1

 Oct 11, 2018 at 09:54 AM Anonymous Says:

The reason for the big drops is reliance on computerized selling. All programs for automatic selling use similar logic and sell without human thought. As soon one sells, they all sell, resulting in huge market drops and losses for everyone.
(Similarly, the over reliance on computers resulted in the mortgage crisis when bankers relied solely on computers to determine the value of the huge mortgage packages. The computer program they were using was flawed. The only ones that escaped that debacle were those who refused to rely on that program.)

Computerized selling should be outlawed or severly regulated.

2

 Oct 11, 2018 at 10:11 AM Anonymous Says:

Reply to #1  
Anonymous Says:

The reason for the big drops is reliance on computerized selling. All programs for automatic selling use similar logic and sell without human thought. As soon one sells, they all sell, resulting in huge market drops and losses for everyone.
(Similarly, the over reliance on computers resulted in the mortgage crisis when bankers relied solely on computers to determine the value of the huge mortgage packages. The computer program they were using was flawed. The only ones that escaped that debacle were those who refused to rely on that program.)

Computerized selling should be outlawed or severly regulated.

Everything what Trump doesn't like should be outlawed. Go back to Russia please. I have to admit you are getting smarter today Mr Educated. Yesterday you were posting under Educated Edith, it didn't work out well. Today: Anonymous. Kol Hakovod, just stick around the Yiden and will get some Seichel

3

 Oct 11, 2018 at 11:43 AM Eduacted Archy Says:

Reply to #2  
Anonymous Says:

Everything what Trump doesn't like should be outlawed. Go back to Russia please. I have to admit you are getting smarter today Mr Educated. Yesterday you were posting under Educated Edith, it didn't work out well. Today: Anonymous. Kol Hakovod, just stick around the Yiden and will get some Seichel

You are a completer liar and fool.

I never post under any other name unless I tell you. Occasionally I mistakenly post anonymous and I'll be glad to fess up when I do.

Edith is not Archy. We are two different people. Feel free to call the moderator at VIN and ask if its from the same URL or e-mail address. Enough of your luies and stupidy already.

re

4

 Oct 11, 2018 at 11:44 AM Educated Archy Says:

Reply to #2  
Anonymous Says:

Everything what Trump doesn't like should be outlawed. Go back to Russia please. I have to admit you are getting smarter today Mr Educated. Yesterday you were posting under Educated Edith, it didn't work out well. Today: Anonymous. Kol Hakovod, just stick around the Yiden and will get some Seichel

And I am not #1

5

 Oct 11, 2018 at 12:19 PM hashomer Says:

The market dropped due to global debts, the huuuge increase in US deficit under Toxic Trumpf and the trade wars started by him which has jittered markets. Not due to Fed or computer trading.

6

 Oct 11, 2018 at 12:59 PM yamsar Says:

Reply to #2  
Anonymous Says:

Everything what Trump doesn't like should be outlawed. Go back to Russia please. I have to admit you are getting smarter today Mr Educated. Yesterday you were posting under Educated Edith, it didn't work out well. Today: Anonymous. Kol Hakovod, just stick around the Yiden and will get some Seichel

What does Kol Hakavod mean? And whatever it means why couldn’t you write it in plain English?

7

 Oct 11, 2018 at 01:01 PM yamsar Says:

Reply to #3  
Eduacted Archy Says:

You are a completer liar and fool.

I never post under any other name unless I tell you. Occasionally I mistakenly post anonymous and I'll be glad to fess up when I do.

Edith is not Archy. We are two different people. Feel free to call the moderator at VIN and ask if its from the same URL or e-mail address. Enough of your luies and stupidy already.

re

Why would you post anonymous? Why do you have to delete the name when it self populated? Must only be because you fool around with different screen names.

8

 Oct 11, 2018 at 02:37 PM ARchie to Edith ... Says:

Reply to #3  
Eduacted Archy Says:

You are a completer liar and fool.

I never post under any other name unless I tell you. Occasionally I mistakenly post anonymous and I'll be glad to fess up when I do.

Edith is not Archy. We are two different people. Feel free to call the moderator at VIN and ask if its from the same URL or e-mail address. Enough of your luies and stupidy already.

re

Silence is golden, so stifle thy self.

9

 Oct 11, 2018 at 06:33 PM TRump Says:

Loco

Too aggressive

Ridiculous

Crazy




A Big Mistake

10

 Oct 11, 2018 at 08:36 PM Trader Joe Says:

Reply to #5  
hashomer Says:

The market dropped due to global debts, the huuuge increase in US deficit under Toxic Trumpf and the trade wars started by him which has jittered markets. Not due to Fed or computer trading.

LMAO, you obviously don't follow the market or have any understanding how it operates.

11

 Oct 11, 2018 at 11:01 PM Anonymous Says:

Reply to #10  
Trader Joe Says:

LMAO, you obviously don't follow the market or have any understanding how it operates.

Long-term trends are usually not dictated by algorithms but underlying economics. Perhaps the current correction happens this way and is exacerbated by computer trading, but the fundamental issue of increasing interest rates and trade wars (which can increase costs and negatively impact profits), are likely valid factors in why this happened. These things put pressure on the market that eventually causes an impact.

12

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