Trump offers fiery response to Federal Reserve rate hike
President Trump offered a fiery response to the Federal Reserve’s decision to hike interest rates on Wednesday, demanding instead that rates be drastically lowered quickly. "Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — BY FAR. Our Country is BOOMING with new Investment!”...
Federal Reserve Chair Kevin Warsh declared during a press conference following the Federal Open Market Committee's decision to raise the Funds Target Range that inflation trends were not meeting expectations. He expressed concerns about persistently high inflation and noted that he had seen little change in recent times. Chair Warsh referred to financial conditions as not restrictive, a view shared widely by the FOMC.
The committee removed some accommodation in their policies, and Warsh's hawkish remarks pushed the US Dollar Index above 100.00, prompting speculation of two more rate hikes by year-end. US Dollar emerged as the strongest against major currencies, including the New Zealand Dollar. The Federal Reserve announced a 25 basis points rate hike as expected, with Chair Warsh delivering hawkish comments about inflation.
Gold prices fell as the US Dollar strengthened, and hawkish remarks fueled bets for further hikes. Japan's ultra-low interest rates had historically been a major funding source, but as the Bank of Japan tightened policy, its advantage may be diminishing.
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