Trump says 'not thrilled' about US interest rate hikes
U.S. President Donald Trump on Thursday told CNBC that he was "not thrilled" about the Federal Reserve's decision to hike interest rates, according to the television network.
Read more at https://www.channelnewsasia.com/news/world/trump-says--not-thrilled--about-us-interest-rate-hikes-10545958
20 Jul 2018 01:41AM
Trump is not aware that US Economy is overheating - due to its expansionary fiscal policies of cutting taxes when the Economy is already booming.
Fed raise interest rate to cool the Economy - to prevent overheating and to prevent forming bubbles that will cause Economic Boom and Bust.
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If Fed did not increase interest rate or worst reduce the interest rate - as what Trump suggest - the booming and overheating US Economy - will overheat very quickly and inflation will go over the moon - causing US Economy to bust very quickly ---- as consumers will overspent due to easy credit from the banks.
Banks will go bust very quickly as business over borrow and consumers over borrow due to easy credit and cheap interest - and then business cannot pay back due to oversupply with falling demands or consumers strain their credit limit too much but can't repay the loans.
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Trump added that he was concerned that the Fed's rate hikes may put the United States at a "disadvantage" while the Bank of Japan and the European Central Bank keep their monetary policy loose, CNBC said.
His remarks to CNBC were not the first time that Trump has departed from a long-standing practise of U.S. presidents steering clear of commenting on Fed policy and the value of the dollar.
The U.S. dollar index cut its gains after Trump's comments that the strong dollar "puts us at a disadvantage," while yields on U.S. Treasury securities hit session lows. U.S. stock prices briefly pared losses after Trump's comments on interest rates.
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Trump is not an economist - he just follow what other Countries do - which may have different economic context - and try to play economist.
This is dangerous for US Economy - when Trump start to intefere with Fed (a professional Central Banker's job) - who have better understanding of the mechanics of the Economy - in administering Monetary Policies.
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