The Fed: Trump ramps up criticism of Powell’s interest-rate policy: reports

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President Donald Trump looks on as his nominee for the chairman of the Federal Reserve Jerome Powell takes to the podium during a press event in the Rose Garden at the White House, November 2, 2017.

President Donald Trump over the weekend escalated his criticism of the Federal Reserve into a personal attack of Fed Chairman Jerome Powell, according to news reports.

At a fundraiser in the Hamptons, Trump said he expected Powell to be a cheap money Fed chairman and lamented the Fed instead had raised interest rates, Bloomberg reported.The story cited three people present who described Trump’s private remarks.

The Wall Street Journal also reported that Trump questioned the need for rate hikes at the event.

The U.S. dollar DXY, -0.16%  drifted lower after the reports of Trump’s remarks. U.S. stocks SPX, +0.27%   extended gains.

Trump said he was told by advisers that Powell liked “cheap money” and yet quickly started raising rates, according to the Journal.

“This can only happen to Trump,” the president joked.

The Fed has raised rate twice this year and have penciled in two more quarter-point interest-rate hikes this year and three more in 2019.

The Fed is concerned about rising prices — the 12-month rate of core inflation in July rose to 2.4%, the highest rate since September 2008.

Trump is not alone in his concern about the Fed, which comes as the Treasury yield curve — the difference in the yield between the 2-year TMUBMUSD02Y, -0.79%   and 10-year TMUBMUSD10Y, -1.20%   was the flattest in 11 years. An inverted yield curve is often considered a predictor of recessions.

Joe Lavorgna, chief economist of the America for Natixis, thinks the Fed is prepared to tighten even if the market swoons.

David Blanchflower, an economics professor at Dartmouth College, said Monday the central bank is making a big mistake with its gradual interest-rate hikes.

He said the Fed is mistaken in its view that labor markets are tight. This is the type of error “that ends recoveries,” he said.

See: Fed is making ‘huge error’ in thinking U.S. labor market is tight

Powell was asked in July about public criticism from the White House.

“Let me just say I’m not concerned about it, and I’ll tell you why,” Powell told NPR. “We have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns.”

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