Business

Trump calls Federal Reserve 'my biggest threat'

U.S. President Donald Trump looks on as Jerome Powell, his nominee to become chairman of the U.S. Federal Reserve, speaks at the White House in Washington Image copyright Reuters
Image caption Donald Trump named Jerome Powell to lead the Federal Reserve

US President Donald Trump has escalated his war of words against America's central bank, calling the Federal Reserve his "biggest threat".

The remarks, made in an interview with US media outlet Fox Business, follow the president's repeated criticism of the Fed for its decision to raise interest rates.

Mr Trump is worried the moves will hurt economic growth.

The Fed maintains the economy is strong enough to handle the increases.

It has been gradually raising its benchmark rate since 2015, aiming to shift rates away from the ultra-low levels puts in place during the financial crisis and recession to spur economic activity.

Before becoming president, Mr Trump said the Fed should be moving faster, accusing it of keeping rates artificially low to help then President Barack Obama.

But his position has changed since he assumed office.

In the Fox interview, he said: "My biggest threat is the Fed, because the Fed is raising rates too fast."

"It's independent, so I don't speak to [Federal Reserve chair Jerome Powell] but I'm not happy with what he's doing," he added.

The comments follow Mr Trump's attacks on the bank last week, after US share prices dropped suddenly. At the time, he said the bank had "gone crazy" and was "out of control".

The Fed's rate increases are intended to prevent uncontrolled inflation, which has shown signs of picking up.

But they have that effect by making borrowing more expensive for businesses and families - and for the US government, which is borrowing to fund a growing budget deficit.

In the most recent financial year, the US spent nearly $800bn more than it brought in in revenue - an increase of $113bn.

Recent presidents have avoided commenting on Fed policy, in a sign of respect for the bank's independence.

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