USA central bankers discussed raising interest rates soon to counter excessive economic strength but also examined how global trade disputes could batter businesses and households, minutes of the Federal Reserve's last policy meeting showed on Wednesday.
FILE PHOTO: A security guard patrols the Federal Reserve building in Washington, DC, U.S., July 16, 2018.
In an interview with American Public Media's "Marketplace" radio show in July, Powell said he was "deeply committed" to maintaining the Fed's tradition of preserving its independence from political concerns. The Fed has raised interest rates five times since Trump took office in January 2017, with two of those coming this year under Powell.
FOMC minutes: another rate hike likely appropriate soon.
Policymakers generally noted that spending by US households and businesses appeared to have "considerable momentum", according to the minutes.
US stocks fluctuated and the dollar fell following the report.
Investec economist Annabel Bishop said in a note that the Bank could strike a more hawkish tone during its scheduled meeting in September, meaning that it could flag potential increases in rates in future meetings, given the volatility in the rand.
On Wall Street, the Dow added 0.2 per cent in late morning trading, while the S&P 500 also rose to near the record high it set in January, as the USA signalled it could delay a closely-watched decision to impose new tariffs on autos.
Fed district banks reported that firms had "greater scope than in the recent past to raise prices" in response to strong demand or rising input costs. According to the minutes o the meeting, members saw trade, housing and emerging markets as downside risks for growth.
Policymakers pointed out that a large prolonged trade dispute could likely hit business sentiment, investment spending and employment. Wide-ranging tariff increases would reduce the purchasing power of USA households, according to the minutes.
Still, his chronic grousing about the monetary policies of the Federal Reserve Board has to be disturbing to people who depend on stable economic policies as much as to those who resist an imperial presidency.
In the midst of a long riff on the economy, Mr. Trump said that he had expected Mr. Powell to adhere to an easy-money monetary policy, by keeping interest rates low, when he nominated Mr. Powell in November to succeed Janet L. Yellen.
US President Donald Trump criticised US Federal Reserve Chairman Jerome Powell for raising interest rates, breaking with recent presidents' practice of not commenting on the Fed's handling of the economy.