Trump says he knows economy better than Federal Reserve chair

The Federal Reserve is not pleasing President Trump with its policy on interest rate increases

The Federal Reserve is not pleasing President Trump with its policy on interest rate increases

Nope, it's the insane ol' Fed under that chair Jerome Powell.

"He has never attacked the Fed's plan or strategy", Kudlow told reporters on the White House lawn Thursday.

Well, take that for what it's worth.

Earlier this week, Trump called the Fed "crazy" and criticized Powell numerous times for "going wild" by raising interest rates too fast, even though they remain below 3 percent, a low level by historical standards.

Now, explaining market actions through psychology is probably as much a mug's game as psychoanalyzing a Fed chair from afar.

A similar story is playing out in the stock market, with Wall Street reassessing just how strong the future looks for American businesses.

"We are having discussions about a potential meeting", Mnuchin said, indicating that the two leaders could meet if the USA side felt the trade discussions were moving in a positive direction. The Fed is expected to raise interest rates at least three times in 2019, up from the two hikes that it forecasted in December.

"Investors are laser-focused on rising bond yields as this has caused agita for both fixed-income as well as equity investors over the past week", Daniel Ives, managing director of equity research at Wedbush Securities, said in an email to CBS MoneyWatch.

Then, because everything is connected, the bond selloff might have fed the rout on Wednesday. "I see this as just a natural correction after the markets were up a lot".

US stocks tumbled yesterday, with the S&P 500 and the Dow marking their biggest daily declines since February 8, and technology stocks were at the centre of the carnage as rising US Treasury yields sent investors fleeing from risky assets. The governors want the Fed Funds rate higher so there will be room to lower rate when the next recession strikes. US earnings are strong.

"I'm not going to fire him", Trump said of Powell, a Trump appointee who legally can only be fired for cause. And foreign countries will likely buy fewer US exports as demand slows and tariffs kick in. I'm not so sure. An increase in interest rates makes debt more expensive, while a corresponding decrease can make it cheaper. If the economy maintains its current pace through the fourth quarter, the resulting 3.8 percent growth would be remarkable at this stage in an expansion but the economy is not overheating or in any danger of doing so.

Last week's jump in yields followed strong U.S. data but many analysts have been anticipating dynamics in the bond market to change due to expectations that central banks in Europe and Japan will soon phase out bond-buying programmes. "The problem in my opinion is the Fed", he added. The Fed has two mandates: maximum employment and stable prices.

The breach of norms is not surprising for a real-estate-developer and reality-star-turned-president who has cheered as Wall Street has soared to new heights this year, hitting repeated records, and used that as proof his economic policies were working.

The Federal Reserve is mandated by Congress to aim for low inflation and low unemployment. Again pointing to history, he also noted "higher wage growth need not be inflationary". - Is inflation about to rise? He also mentioned the Fed is monitoring other risks - "the strength of economies overseas, the effects of ongoing trade disputes, and financial stability issues" - all of which, if they prove real, would suggest less tightening rather than more as a monetary policy response. This could be a worry for Fed officials trying to keep a lid on inflation.