Fed signals more rate hikes despite emerging market 'stress'

Trump: 'My Biggest Threat Is The Fed' – Talking Points Memo

Trump said he doesn't speak with Chairman Jerome Powell because of the Fed's political independence but said.

Classifying China as a currency manipulator has been threatened by US President Donald Trump and past administrations, but has not been done since 1994.

While the US dollar has strengthened along with the entire domestic economy - which grew at a rate of 3.2 percent over the first half of 2018 - China's renminbi, also known as the yuan, has continued to fall in value.

Last week, Trump called the Fed "loco" and "too aggressive" for its commitment to cooling the economy, and blamed the central bank for the more than 1,000-point drop in the Dow Jones industrial average last week.

On the other hand, while risks were 'roughly balanced, ' some Fed members said instability in emerging economies - many of which are heavily indebted and vulnerable when U.S. rates rise - could 'spread more broadly through the global economy and financial markets'.

The central bank continues to have a bullish outlook on the USA economy, and praised "robust increases" in household income, the minutes show.

Bullard, who is not a voting member of the FOMC, said that despite Trump's public criticism of the Fed, he "like [s] the president's appointments" to the central bank's board.

The U.S. economy has been growing more quickly this year than many economists believe is possible without generating higher inflation, with the jobless rate at its lowest level in decades.

"A few participants expected that policy would need to become modestly restrictive for a time", according to the minutes.

The Fed also took notice of clouds forming on the horizon.

Furthermore, "some" at the meeting said risks grew as the United States economy increasingly outpaced its rivals" more sluggish growth "because of the potential for further strengthening of the dollar'.

Some investors say that, after years of easy money, pockets of risk have built up throughout the global economy - raising the chances that a bubble could burst or banks could see significant defaults on debt as borrowing costs begin to increase.

The United States has imposed tariffs on about $250 billion in Chinese goods, and Beijing has responded by targeting about $110 billion in USA products.

Compared to the minutes of Fed's previous meeting held in August, the September minutes appeared to show less discussion around the prospects that a recession might be lurking around the corner.

US stock prices recovered some earlier losses but were still down for the day following the minutes.

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