Despite Trump criticism, Fed sees need for more rate hikes

The New York Stock Exchange building. A selloff in US markets on Wednesday 10 sparked a round of global selling

Critics have expressed concern that his continual attacks on the Fed, which began in the summer, threaten its need to operate free of political pressure from the White House or elsewhere to properly manage interest rate policy.

Policy makers at the Federal Reserve remain focused on gradually raising interest rates in response to strength in the US economy and low unemployment, according to minutes of their September meeting released Wednesday. But others argued against stronger tightening of monetary policy without "clear signs" the economy is running hot. The display of solidarity raises the prospect of a fourth rate-hike this year in December. Trump has previously called Fed policies "crazy".

US President Donald Trump reignited his controversial criticism of the US central bank Tuesday, calling the Federal Reserve his "biggest threat".

Furthermore, "some" at the meeting said that risks grew as the U.S. economy increasingly outpaces its rivals' more sluggish growth "because of the potential for further strengthening of the dollar". Analysts have pointed to rising interest rates, which can make stocks a less attractive investment.


In February, Trump tapped Powell, then a member of the Fed's board, to become chairman after he had decided not to offer Yellen a second four-year term.

The Fed released an updated economic forecast at the September meeting.

The median view of all Fed officials was that rates should be increased one more time this year and three times next year and a final quarter-point rate hike in 2020. The Fed's preferred measure of price pressures rose just 2.2 percent in the 12 months through August, just slightly above the central bank's 2 percent target, and no Fed officials have raised alarm bells over the possibility it may soon accelerate. That would put it above the 3 percent level which the Fed now pegs as its "neutral rate".

Markets fear currency crises in Turkey, 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 US. The minutes noted that the tax cuts Trump had pushed through Congress late last year along with the spending increases Congress approved at the beginning of this year were boosting economic activity.

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