As Trump rails against Fed, Powell takes to Capitol Hill

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The Dollar advanced Wednesday after shrugging off President Donald Trump's latest attack on the Federal Reserve (Fed), which saw him describe the central bank as the greatest risk facing the USA economy at the moment. "I'm just saying this: I'm very unhappy with the Fed because Obama had zero interest rates".

But the president has lately expressed frustration with the Fed's gradual interest rate increases, created to slow down the economy and prevent inflation from taking off - standard macroeconomic steps that Trump insists are undercutting his expansionary fiscal moves.

Trump was also cited in the report as say that it was "too early to say, but maybe he regrets nominating Mr. Powell". Trump called the Fed the "biggest risk" to the economy, due to the three times it's raised interest rates this year; it will likely do so a fourth time in December. "If the data come in as I expect, I believe that some further gradual adjustment in the federal funds rate will be appropriate". The Fed has been slowly raising rates this year to protect against higher inflation or financial bubbles.

"I'm not happy with what he's doing because it's going too fast", Trump said.

"Everyone should be allowed to criticize us and question whether or not we are undertaking the right actions", Chicago Federal Reserve bank President Charles Evans said earlier this month. George HW Bush blamed his 1992 election defeat on then-Fed Chairman Alan Greenspan, and Lyndon B. Johnson clashed with Fed chief William McChesney Martin over raising rates in 1965.

President Trump discusses the midterm elections, the Fed's interest rate hikes and why US economic growth will help bring people together.

Trump is also not happy with some of the members of the Fed he has already appointed. Volcker famously saved the USA economy from double-digit inflation in the 1980s by jacking up rates, despite massive criticism.

Inflation has increased about two percent this year, in line with the Fed's target, but economists fear growing demand, combined with the tariffs and a labor shortage could ignite price increases.

Increases in the federal funds rate have a ripple effect on the economy and the stock market.

"With the economy now operating at or close to mandate-consistent levels for inflation and unemployment, the risks that monetary policy must balance are now more symmetric and less skewed to the downside". Hence, higher rates mean higher cost of borrowing for consumers and corporations, which, in turn, lead to lower profits and a weaker economy. He joined Trump's other two picks, Powell and Randal Quarles, who now sit on the board with Lael Brainard, an appointee of former President Barack Obama.

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