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US-ECONOMY-TRUMP-FED-G20
Trump respects Fed’s independence: Mnuchin
BUENOS AIRES, July 22, 2018 (BSS/AFP) – US President Donald Trump has no
intention of putting pressure on the Federal Reserve despite criticizing
interest rate hikes, Treasury Secretary Steven Mnuchin said on Saturday.
Trump sparked concerns over Fed independence after breaking with long-
established executive branch practice of not commenting on the US central
banking system.
“This is not in any way the president trying to intervene in the currency
markets,” Mnuchin told reporters ahead of the two-day Group of 20 summit for
finance ministers and central bankers in Buenos Aires.
“The president has made it very clear to me that he supports the Fed’s
independence.”
In an interview aired by US cable television station CNBC on Thursday,
Trump had said “I’m not thrilled” about the Fed’s interest rate increases.
“Because we go up and every time you go up they want to raise rates
again,” he added.
“I’m not happy about it. But at the same time I’m letting them do what
they feel is best.”
Analysts said that quite apart from bringing into question the
independence of the Fed, Trump’s comments reinforced the widely-held belief
that he sees a strong dollar as a disadvantage to the US economy.
But Mnuchin distanced himself from that position.
“Longer term, a strong dollar is both in the interest of the United States
and is also the result of the United States being an extraordinary economy
both in terms of growth and investment,” Mnuchin said.
“To the extent the president makes certain comments, I don’t think that’s
in any way trying to interfere or intervene with the actual market.”
However, he baulked at suggestions Trump had erred in speaking out against
the rates rise, insisting it was normal for someone from the president’s
background to simply take an interest in such matters.
“I don’t think it was a mistake. I can’t comment on why he did it,” said
Mnuchin.
“Being a real estate person, real estate people obviously follow interest
rates.
“I want to assure you this was not intended to put pressure on the Fed or
jeopardize the Fed’s independence.”
However, Trump’s comments may have had the desired effect as the dollar
slid against the euro and pound on Friday.
His attacks on China and the European Union, whom he accuses of
deliberately keeping their currencies low, sparked fears of a potential
currency war in addition to a trade conflict.
BSS/AFP/HR/0925