Central Bank Disappointing Trump as Calls for More Rate Hikes Ring

President Donald Trump expressed disappointment in the Federal Reserve on Monday right as Dallas Fed President Robert Kaplan forecasts more hikes.

“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said, referring to his Fed Chairman nomination, Jerome Powell.

“We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said.

Trump has been vocal with criticisms of Powell’s fed, saying in an on-air interview earlier in the year that he did not agree with the decision to raise interests rate.

“I don’t necessarily agree with it, because he is raising interests rates,” Trump told CNBC.

“I’m not thrilled because we go up and every time we go up they want to raise rates again and I am not happy about it,” he would say.

The President’s latest round of disappointment comes one day after Dallas Fed President Robert Kaplan said that with the current fed funds rate at 1.75-2.00%, the Fed should continue raising interest rates until they hit their neutral level.

According to Kaplan, those appear to be about “three or four quarter-point rate increases away.”

Once this neutral level is reached, the Fed President believes a reassessment of the economy should take place before any more action is taken.

“At that point, I would be inclined to step back and assess the outlook for the economy and look at a range of other factors—including the levels and shape of the Treasury yield curve—before deciding what further actions, if any, might be appropriate.”

As Zero Hedge notes, Powell admitted that the shape of the yield curve, which yesterday dipped to a new post-crisis low of 22bps, “suggests to me we are ‘late’ in the economic cycle” although he mitigated the risk, saying “I do not discount the significance of an inverted yield curve.”

After raising its benchmark rate from 1.75 percent to 2 percent in June, the Federal Open Market Committee said two more rate hikes were appropriate, a move which would bring the 2018 total to four increases.