China's yuan sinks further after US currency report

Under Jerome Powell the Fed has been gradually raising rates as the US economy has strengthened as a way to prevent a run-up in inflation

In remarks to the Economic Club of Memphis, Bullard pointed to a possible next chapter in the central bank's discussion: What to do if, as expected, the growth rush from recent tax cuts, increased government spending and other positive economic trends begins to fade. The display of unanimity could bolster expectations the central bank will raise rates a fourth time this year in December.

Rate rises have become a divisive issue in the U.S., with Donald Trump repeatedly criticising monetary policy decisions and labelling the Federal Reserve his "biggest threat".

Speaking on Fox News on 16 October he said: "The Fed is raising rates too fast".

Trump followed up previous strong attacks on the Fed by complaining again that interest rates are rising too quickly.

The central bank continues to have a bullish outlook on the US economy, and praised "robust increases" in household income, the minutes show.

Since the Treasury's last currency report was issued on April 13, the yuan has fallen by more than 9 per cent against the U.S. dollar.

The Fed has been raising interest rates since 2015 and after the rate hike last month it stopped describing the stance of monetary policy as "accommodative", meaning that it no longer thought the level of interest rates was stimulating the economy.


Instead, some members of the committee believed that the Fed would need to impose "modestly restrictive" conditions on the economy, the minutes show.

Still, a "couple" of participants said they would oppose this unless clear danger signs - an overheating economy and mounting inflation - were to arise.

Markets fear currency crises in Turkey and Argentina and other emerging market economies could spread beyond their borders - something that could be sparked as investors pull out to take advantage of higher rates in the United States.

Randal Quarles, who rarely discusses monetary policy, painted a somewhat more optimistic picture than his colleagues on the economy's longer-term capacity and said he favoured a bit more dovish path than most others in the USA central banking system.

The White House has put punishing tariffs on more than $250 billion in annual Chinese imports.

Last week, in a series of comments, Trump called the Fed "out of control", although he said in response to a question that he would not seek to oust Powell as chairman.

Wall Street, which had struggled through much of the day, closed slightly lower, with stocks paring losses after the minutes' release.

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