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Trump attacks Federal Reserve after latest rate hike
Trump attacks Federal Reserve after latest rate hike

The conflict between Donald Trump and the Fed has reached a new level. Trump’s stance towards Fed’s Chairman Jerome Powell turned even more hostile after the recent funds rate hike. The president moves beyond expressing his displeasure, but is ready to act decisively, up to firing Powell. Such statements, besides investors’ concerns, raise questions to Mr. Trump – if he is actually aware how far his power may reach. Notably, only a few countries in the world have an independent regulator and the Fed is one of them. Thus, Powell’s dismissal might shake markets way stronger than any interest rate hike as it will mean that the regulator’s independence is just a myth. Therefore, US Treasury Secretary Steven Mnuchin had to explain Trump’s rant. Mnuchin twitted a statement quoting the president as saying he did not agree with the Fed’s policy and considered the decision to hike the funds rate absolutely wrong but he still wouldn’t oust Powell as he was not authorized to do it. Indeed, the American history has never seen a similar precedent yet.

Published: 2018-12-28 16:35:29 UTC
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