Econometer: Is Trump's criticism of the Fed fair?


"Of particular concern are China's lack of currency transparency and the recent weakness in its currency", Mnuchin said in releasing a twice-yearly report to Congress on how country's manage exchange rates and trade.

But Mr. Quarles observed that the USA workforce becoming more educated may have upended that relationship.

With a huge balance sheet driven by previous quantitative easing and an interest rate just slightly over inflation, monetary policy is still highly accommodative.

Policy makers have also estimated a long-run rate between 2.5 percent to 3.5 percent, but Fed chair Powell has previously highlighted the uncertainty about where the longer-run level actually sits.

The Fed should "follow that course through the temporarily shifting and sometimes conflicting signs from the economy unless some strong and steady signal requires a firm but moderate correction", he said at the Economic Club of NY. Responding to a moderator question, he said he thinks the Fed could nudge rates higher "for a period of time" without moving into restrictive territory.

In the Treasuries market, the 10-year yield hit a one-week high on worries about the number of interest rate increases from the Fed. "The sharp rise in rate and tariffs are on everybody's minds now".

They are carefully trying to keep the economy on even keel all while keeping a watchful eye on possible inflation risks that might be brought about after last year's injection of fiscal stimulus through tax cuts and a massive spending bill.

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"All participants expressed the view that it would be appropriate for the committee to continue its gradual approach to policy firming by raising the target range for the federal funds rate", according to the minutes.

Trump spoke during a Tuesday interview with "Trish Regan Primetime" on Fox Business Network.

When asked earlier this month about the president's comments, Powell shrugged them off, noting he's focused on the task at hand: keeping the economy steady. Central bank officials were unified in voting last month to boost rates by a quarter point, the Fed's account of its September policy meeting shows. "Because, you looked at the last inflation numbers, they're very low", Trump said.

The Fed directly controls only short-term interest rates. "And it's independent, so I don't speak to them, but I'm not happy with what he's doing because it's going too fast".

Asked if he thinks the current path of rate hikes is threatening economic growth, Quarles said it depends on one's expectations about the USA economic trajectory.

"Why this came as such a surprise is something of a mystery as the minutes didn't appear to deviate from the message after the meeting when the central bank raised interest rates and removed the reference to policy being accommodative", Erlam said.