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Trump says Fed 'out of control' but won't fire Powell

Trump says Fed 'out of control' but won't fire Powell


AFP
WASHINGTON
President Donald Trump renewed his attacks on the US central bank on Thursday, saying it was"out of control"in raising interest rates but saying he had no plans to dismiss Federal Reserve Chairman Jerome Powell.
With global stocks declining for the second day amid concerns about rising interest rates, Trump blamed the Federal Reserve.
"It is a correction that I think it is caused by the Federal Reserve, with interest rates,"Trump told reporters at the White House."I think the Fed is out of control."
However, asked about Powell's future, Trump said,"I'm not going to fire him."
Trump named Powell to lead the central bank but can only fire him for cause.
Trump told the Fox & Friends television broadcast that the central bank was"making a big mistake."And while he acknowledged higher rates helped savers, he criticised the Federal Reserve's tactics as"too aggressive."
The comments followed his strongest criticism late on Wednesday when he said the Fed had"gone crazy"and blamed the interest rate increases for the stock selloff, which caused the Dow Jones Industrial Average to lose more than 800 points in its worst tumble since February.
The rout caused a domino effect worldwide, with losses spreading to Asia and Europe as investors remained concerned about rising rates -- which would send more buyers out of equities and into bonds -- as well as the impact of Trump's trade conflict with China on corporate profits.
Wall Street was on a roller coaster ride Thursday, losing more than one percent on the Dow and S&P, but then recovering slightly. London lost nearly two percent, Frankfurt fell 1.5 percent, and Tokyo plunged nearly four percent.
White House economic adviser Larry Kudlow on Thursday said Trump's opinions had no weight on the Fed's actions.
"We know the Fed is independent. The president is not dictating policy to the Fed. He didn't say anything remotely like that,"he said on CNBC.
Kudlow said the Fed was managing"the transition from ultra, ultra easy money ... to something more normal,"by raising rates gradually.
Trump has repeatedly touted the spate of Wall Street records as proof of the success of his economic programme, including his confrontational trade strategy, and criticised the Fed for raising the benchmark interest rate -- three times this year -- saying it would undermine his efforts.
The Fed is an independent body and presidents in recent decades have avoided commenting publicly on its actions.

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