Further US rate hikes 'most likely' needed: Fed minutes

Marco Green
October 18, 2018

Policy makers at the Federal Reserve remain focused on gradually raising interest rates in response to strength in the USA economy and low unemployment, according to minutes of their September meeting released Wednesday.

In an interview with Fox Business Network Tuesday, Trump continued his on-going criticism of the Fed for its interest rate increases, which he thinks are slowing the economy.

Still, a "couple" of participants said they would oppose this unless clear danger signs - an overheating economy and mounting inflation - were to arise. Following the rate increase in September, Trump said he was "not happy" with the decision.

Fed Chairman Jerome Powell has said the central bank will monitor interest rates to avoid raising them too quickly, which could hamper US growth.

The meeting took place three weeks ago - before last week's global market meltdown that saw stocks and bond prices hit sharply amid jitters over rising USA rates and the United States trade war with China. Analysts have pointed to rising interest rates, which can make stocks a less attractive investment.

Last week, Trump criticized the US central bank twice, saying it was raising interest rates so swiftly that it threatened the country's economic health.

Key U.S. economic data to watch today includes the Philadelphia Fed Manufacturing Index, the Conference Board's Leading Index and Weekly Unemployment Claims.

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

Last week, Trump called the Fed "loco" and "too aggressive" for its commitment to cooling the economy, and blamed the central bank for the more than 1,000-point drop in the Dow Jones industrial average last week. 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. The 3 percent level is the point where officials believe Fed policy is neither boosting growth or holding it back. Auto loan rates are at a nine-year high, and 30-year fixed mortgage rates recently climbed to their highest level in seven years.

Other reports by Click Lancashire

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