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'Stubborn child': Trump slams Fed again but Powell urged to hold his nerve

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25.06.2019

Even as Donald Trump fired another broadside at the US Federal Reserve Board, the International Monetary Fund was endorsing the Fed's management of US monetary policy and implicitly urging it to hold its nerve, and its independence.

On Monday Trump tweeted that "despite a Federal Reserve that doesn’t know what it is doing" the US was on course for "one of the best Months of June in US history".

"Think of what it could have been if the Fed had gotten it right. Thousands of points higher on the Dow, and GDP in the 4’s or even 5’s [sic]. Now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!’’ he wrote.

The Trump tweets ignore the reality that, with unemployment below 4 per cent, any independent central bank implementing monetary policy in an economy operating near capacity and growing at four or five per cent would be raising rates aggressively, not sitting on their hands with a near-term bias towards easing as the Fed is at present.

Donald Trump: ''Now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!’’ Credit:AP

They also ignore the role that Trump’s trade policies - what the US is doing to other countries - are playing in depressing global growth rates, slowing the US........

© Brisbane Times