The world's largest economy, the United States of America is struggling with a 40-year high inflation. US federal reserve is poised to unleash another interest rate hike on Wednesday after the latest data showed a worrying US inflation picture.

World Business Watch: US Fed reserve set for another rate hike on Wednesday

Global markets tumbled after a hawkish assessment by US Federal Reserve chair Jerome Powell. The richest Americans lost nearly $78 billion after the 8-minute speech. Palki Sharma tells you why central banks alone cannot solve this crisis.

Gravitas: Markets tumble as US Fed hints at more rate hikes

The US dollar surged to a 20-year high against a basket of currencies on Monday after Federal Reserve Chair Jerome Powell signaled interest rates would be kept higher for longer to bring down soaring inflation.

US Dollar hits 20-year high as Fed flags higher rates for longer

Democratic US Senator Elizabeth Warren said on Sunday that she was very worried that the Federal Reserve was going to tip the nation's economy into recession and that interest rate hikes would put people out of work.

US Senator: Fed will tip US into recession

US Fed Chair Jerome Powell's speech at the Federal Reserve's annual forum has sent jitters to markets causing a crash. His announcement that interest rates would continue to rise and stay high cost America's richest people to lose close to 78 billion dollars.

FED Chief's speech causes markets to crash, Powell says more rate hikes to come

US Fed chair Chair Jerome Powell addressed annual central bankers gathering. He said taming inflation will inflict pain on Americans and Fed could keep lifting rates sharply for 'some time'.

US inflation woes: No sign of relief for millions of Americans

Central bank FED has hiked interest rates in succession but now the minutes of last month's policy meetings show that there is little evidence that US inflation pressures were easing and settled.

Fed minutes show more rate hikes in the pipeline, but pace could slow

On Friday, the Japanese yen experienced the biggest decline against a strengthening U.S. dollar as a two-day rise in stocks acknowledged market expectations that the Fed will need to take additional action to keep inflation under control. That realization came after a number of Federal Reserve officials cautioned investors not to be overconfident following this week's minor easing in inflation numbers in speeches and statements.

The most recent example was San Francisco Fed President Mary Daly, who stated on Thursday that a rate increase of 50 basis points in September "makes sense" in light of recent economic data, especially data on inflation, but she is willing to raise the rate if necessary.

Thursday saw a decline in the Nasdaq and S&amp;P 500 amid further indications of slowing inflation. The euro fell to $1.0311 while the dollar index increased by 0.1% to 105.210. The Japanese yen lost 0.12% to 133.19 per dollar, and the last known price of sterling was $1.2184, down 0.23% from the previous day. The euro increased 0.05% to 137.340 yen. Even the New Zealand dollar, which is expected to have a significant rate increase next week, decreased 0.16% to $0.643 against the US dollar.

According to data released on Thursday, U.S. producer prices (PPI) unexpectedly declined in July due to a decrease in the price of energy items. That came after the shocking report on Wednesday that the consumer price index (CPI) was unchanged in July as a result of a decline in gasoline costs.

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While such information sparked a brief relief bounce in markets concerned about the Fed's accelerated tightening course, it was fleeting. The tech-heavy Nasdaq has just recovered from mid-June lows, but it is still down nearly 18% for the year. Along with the 225 basis points of Fed rate increases since March, the dollar index has continued to strengthen, up 10% so far this year. From Wednesday's top of 135.30 against the yen, it had dropped as low as 131.74 overnight, a one-week low. On Friday, it was back at 133.245.

(with inputs from agencies) 
&nbsp;

On Friday, the Japanese yen experienced the biggest decline against a strengthening U.S. dollar as a two-day rise in stocks acknowledged market expectations that the Fed will need to take additional action to keep inflation under control.

On Friday, the Japanese yen experienced the biggest decline against a strengthening U.S. dollar as a two-day rise in stocks acknowledged market expectations that the Fed will need to take additional action to keep inflation under control. That realization came after a number of Federal Reserve officials cautioned investors not to be overconfident following this week's minor easing in inflation numbers in speeches and statements. The most recent example was San Francisco Fed President Mary Daly, who stated on Thursday that a rate increase of 50 basis points in September "makes sense" in light of recent economic data, especially data on inflation, but she is willing to raise the rate if necessary. Thursday saw a decline in the Nasdaq and S&P 500 amid further indications of slowing inflation. The euro fell to $1.0311 while the dollar index increased by 0.1% to 105.210. The Japanese yen lost 0.12% to 133.19 per dollar, and the last known price of sterling was $1.2184, down 0.23% from the previous day. The euro increased 0.05% to 137.340 yen. Even the New Zealand dollar, which is expected to have a significant rate increase next week, decreased 0.16% to $0.643 against the US dollar. According to data released on Thursday, U.S. producer prices (PPI) unexpectedly declined in July due to a decrease in the price of energy items. That came after the shocking report on Wednesday that the consumer price index (CPI) was unchanged in July as a result of a decline in gasoline costs. Also Read: IN PICS | Trump supporters gather outside his Mar-a-Lago estate, say FBI raid a 'witch hunt' While such information sparked a brief relief bounce in markets concerned about the Fed's accelerated tightening course, it was fleeting. The tech-heavy Nasdaq has just recovered from mid-June lows, but it is still down nearly 18% for the year. Along with the 225 basis points of Fed rate increases since March, the dollar index has continued to strengthen, up 10% so far this year. From Wednesday's top of 135.30 against the yen, it had dropped as low as 131.74 overnight, a one-week low. On Friday, it was back at 133.245. (with inputs from agencies)

Japanese yen weakens against dollar fearing Fed's super-charged tightening policy

On Thursday, several U.S. Federal Reserve officials pushed back against rumours that they might limit the pace of interest rate increases, which helped the dollar gain ground. In contrast, the pound was unchanged ahead of a meeting of the Bank of England. The dollar index, which compares the value of the dollar to those of six other currencies, had somewhat increased overnight but was unchanged in early trade at 106.39. This week, it is up about 0.5%, reversing the pattern from the previous two weeks.

Mary Daly of the San Francisco Fed and Neel Kashkari of the Minneapolis Fed both expressed their desire to control excessive inflation overnight, echoing similar sentiments expressed by other officials the day before. Even after the dollar index reached a two-decade high in July, according to a Reuters survey of economists earlier this week, 70% said the dollar had yet to top in this cycle.

The market is pricing in a 58 per cent chance of a 50 basis point rate hike at the Fed's September meeting and a 42 per cent possibility of an additional significant 75 basis point increase, according to CME's FedWatch tool. Sim, however, said that the dollar's recent performance was mixed since riskier currencies have been supported by the increased risk sentiment, which has also aided U.S. market prices.

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The Australian dollar, which had gained 0.46 per cent the previous day, was at $0.695 on Thursday morning as it attempted to climb back over the significant $0.7 level it had fallen from earlier in the week as a result of what appeared to be dovish comments from the central bank. Prior to a BOE meeting later on in the day, when most investors anticipate the central bank to hike the rate by 50 basis points to 1.75 per cent, the highest level since late 2008, the pound was little moved at $1.2158. This is related to central bank news.

(with inputs from agencies)

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On Thursday, several U.S. Federal Reserve officials pushed back against rumours that they might limit the pace of interest rate increases, which helped the dollar gain ground.

On Thursday, several U.S. Federal Reserve officials pushed back against rumours that they might limit the pace of interest rate increases, which helped the dollar gain ground. In contrast, the pound was unchanged ahead of a meeting of the Bank of England. The dollar index, which compares the value of the dollar to those of six other currencies, had somewhat increased overnight but was unchanged in early trade at 106.39. This week, it is up about 0.5%, reversing the pattern from the previous two weeks. Mary Daly of the San Francisco Fed and Neel Kashkari of the Minneapolis Fed both expressed their desire to control excessive inflation overnight, echoing similar sentiments expressed by other officials the day before. Even after the dollar index reached a two-decade high in July, according to a Reuters survey of economists earlier this week, 70% said the dollar had yet to top in this cycle. The market is pricing in a 58 per cent chance of a 50 basis point rate hike at the Fed's September meeting and a 42 per cent possibility of an additional significant 75 basis point increase, according to CME's FedWatch tool. Sim, however, said that the dollar's recent performance was mixed since riskier currencies have been supported by the increased risk sentiment, which has also aided U.S. market prices. Also Read: India relying heavily on oil palm to reduce $19 billion vegetable oil imports The Australian dollar, which had gained 0.46 per cent the previous day, was at $0.695 on Thursday morning as it attempted to climb back over the significant $0.7 level it had fallen from earlier in the week as a result of what appeared to be dovish comments from the central bank. Prior to a BOE meeting later on in the day, when most investors anticipate the central bank to hike the rate by 50 basis points to 1.75 per cent, the highest level since late 2008, the pound was little moved at $1.2158. This is related to central bank news. (with inputs from agencies)

Dollar surges reversing previous two-week trend as Fed officials anticipate further rate hikes

The United States Federal Reserve has once again hiked the interest rate by 0.75%, this as the country's inflation level has touched 40-year high. This is the second in a row and fourth time this year, that the Fed has raised interest rates.

Joe Biden's address on U.S. inflation | Fed attacks US inflation with 75 basis point hike

Amid the ongoing global recession worries, the US Fed has hiked rates by 75 bps. Fed has also hinted at further rate hikes in the future.

US Fed hikes interest rates for the fourth time this year

Wall Street rallies after the US Fed hikes rates by 75 bps

The US Federal Reserve raised its benchmark interest rate by 75 basis point. This is the biggest and most aggressive interest rate increase since 1994. The Federal Open Market Committee said that it decided to raise the target range for the benchmark borrowing rate to 1.5%-1.75%.

Federal reserve raises benchmark rates, biggest interest rate hike in 3 decades

All eyes are on US central bank Fed's decision on interest rates. There are predictions that the Fed could increase rates by 0.75% in the United states. This will be the biggest interest rate hike.

Wall Street slips into a bear market, all eyes on US fed interest rate hike

The Federal Reserve’s decision to hike interest rates rattled Wall Street on Thursday as major US stocks tanked at the stock market.

The S&amp;P 500, Dow and Nasdaq plunged sharply, with losses accelerating during intraday trading.

The S&amp;P 500 fell by 3.7 per cent, the Dow Jones Industrial Average tumbled 1,100 points, or 3.3 per cent, to 32,945 and the Nasdaq lost 5 per cent.

Major tech stocks tanked at Nasdaq, with Google-parent Alphabet Inc, Apple Inc,&nbsp;Microsoft Corp, Meta Platforms, Tesla Inc and Amazon.com falling between 4. 5 per cent and 6.5 per cent

A day earlier, the blue-chip index posted its best single-session gain since May 2020, rising 2.99 per cent.

The bloodbath in the US was also reflected in European stocks as fears of a recession, suggested by the Bank of England after it hiked rates, dampened enthusiasm from Federal Reserve Chair Jerome Powell’s remarks on Wednesday.

He had said that policymakers were not considering 75 basis-point moves in the future.

The yield on 10-year Treasury notes rose 16.9 basis points to 3.084 pre cent, while inflation-hedge gold bounced higher after Powell also emphasized risks to the economy from soaring inflation.

Watch |&nbsp;Fed raises interest rates by 50-bps

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"It's a very messy environment for investors right now," Anthony Saglimbene, global market strategist at Ameriprise Financial, told Reuters.

"There`s an overall negative sentiment in the market."

He expects the markets to remain volatile until there is a clear picture on Fed rate policy and its trajectory later this year.

The dollar index rose 1.131 per cent, rebounding after falling sharply on Wednesday following the Fed`s rate hike. It is up more than 7 per cent so far this year.

There was some respite in China where shares recovered some ground, gaining 0.7 per cent as mainland markets resumed trade after a three-day holiday.

Investors also cheered a pledge by China’s central bank for more monetary policy support to help businesses badly hit by the latest COVID-19 outbreak.

Oil prices rose as a stronger dollar offset supply concerns after the European Union`s plans for new sanctions against Russia, including an embargo on crude in six months.

(With inputs from agencies)

WATCH WION LIVE

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The Federal Reserve’s decision to hike interest rates rattled Wall Street on Thursday as major US stocks tanked at the stock market. The S&P 500, Dow and Nasdaq plunged sharply, with losses accelerating during intraday trading.

The Federal Reserve’s decision to hike interest rates rattled Wall Street on Thursday as major US stocks tanked at the stock market. The S&P 500, Dow and Nasdaq plunged sharply, with losses accelerating during intraday trading. The S&P 500 fell by 3.7 per cent, the Dow Jones Industrial Average tumbled 1,100 points, or 3.3 per cent, to 32,945 and the Nasdaq lost 5 per cent. Major tech stocks tanked at Nasdaq, with Google-parent Alphabet Inc, Apple Inc, Microsoft Corp, Meta Platforms, Tesla Inc and Amazon.com falling between 4. 5 per cent and 6.5 per cent A day earlier, the blue-chip index posted its best single-session gain since May 2020, rising 2.99 per cent. The bloodbath in the US was also reflected in European stocks as fears of a recession, suggested by the Bank of England after it hiked rates, dampened enthusiasm from Federal Reserve Chair Jerome Powell’s remarks on Wednesday. He had said that policymakers were not considering 75 basis-point moves in the future. The yield on 10-year Treasury notes rose 16.9 basis points to 3.084 pre cent, while inflation-hedge gold bounced higher after Powell also emphasized risks to the economy from soaring inflation. Watch | Fed raises interest rates by 50-bps "It's a very messy environment for investors right now," Anthony Saglimbene, global market strategist at Ameriprise Financial, told Reuters. "There`s an overall negative sentiment in the market." He expects the markets to remain volatile until there is a clear picture on Fed rate policy and its trajectory later this year. The dollar index rose 1.131 per cent, rebounding after falling sharply on Wednesday following the Fed`s rate hike. It is up more than 7 per cent so far this year. There was some respite in China where shares recovered some ground, gaining 0.7 per cent as mainland markets resumed trade after a three-day holiday. Investors also cheered a pledge by China’s central bank for more monetary policy support to help businesses badly hit by the latest COVID-19 outbreak. Oil prices rose as a stronger dollar offset supply concerns after the European Union`s plans for new sanctions against Russia, including an embargo on crude in six months. (With inputs from agencies) WATCH WION LIVE

Dow, Nasdaq plunge sharply on account of US Fed hike, markets expected to remain volatile

As the United States battles with too-high inflation, The US fed signals more rate hikes in 2022. Powell said that More aggressive rate hikes if needed.

Powell: More aggressive rate hikes if needed as the US battles with too-high inflation

Central Bank Federal Reserve is likely to hike interest rates this March and has reaffirmed plans to end its bond purchases.

US: Central Bank Federal Reserve is likely to hike interest rates in March

Worries about the possibilities of a quicker rate hike from the US Fed Reserve have dragged the global markets down. Indian markets have witnessed marginal recovery after falling for six-straight days.

Anxiety over US Fed decision drags down markets

The United States Federal Reserve said that it would end its pandemic-era bond purchases in March and pave the way for three quarter-percentage-point interest rate hikes by the end of 2022 as the economy nears full employment and the US central bank copes with a surge of inflation.

US Federal Reserve signals three rate hikes in 2022 as inflation fight begins

US Federal Reserve has held its key interest rates near zero and said it plans to continue supporting economic recovery. Fed is maintaining the policies until the economy heals further from the effects of COVID-19 pandemic.

World Business Watch: Powell waves inflation worries away as Fed holds rates near zero

Federal Reserve President Robert Kaplan on Monday said his forecast for 5% U.S. GDP growth this year.

Fed sees U.S. economy growing at least 5% this year

With US-China trade tensions roiling markets, investors are counting on support for stocks coming from a Federal Reserve willing to keep cutting interest rates to help the US economy avoid a severe downturn.

A quarter-point rate reduction is widely expected when the Fed issues its next policy statement on Wednesday, which would be the central bank's second such cut after lowering rates in July for the first time since 2008. That puts the greater focus on clues about how much further the Fed will go.

“If the Fed gives forward guidance that suggests less than what the market is thinking, then you will probably see markets sell-off," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia. "So long as the Fed plays along with what markets are pricing in think markets will be very stable.”

The Fed's 180-degree pivot from tightening monetary policy last year to easing it has helped drive the stock market's overall strong performance in 2019. The benchmark S&amp;P 500 has climbed 20 per cent this year and is near all-time highs.

The central bank in July cited signs of a global slowdown, simmering US-China trade tensions and a desire to boost too-low inflation as it lowered borrowing costs.

Markets are pricing in a near 90 per cent probability that the Fed will shave another quarter-point from its current overnight lending rate of 2.00 per cent to 2.25 per cent, according to the CME Group's FedWatch tool. There is a roughly 65 per cent probability that the Fed makes at least one more quarter-point cut by the end of the year, according to FedWatch.

"The market is going to want to see a focus that we have a cut and there is likely more coming," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "They want to know that the Fed is vigilant and will act aggressively if needed."

That raises the importance of the newest set of policymakers' rate-path projections - the so-called dot plot - that will be released along with the rate decision. UBS economists said in a note they expect that will shift lower overall for 2019, but project only two cuts total for the year, which could irk both investors and a <a href="https://www.wionews.com/world/turkeys-erdogan-to-discuss-with-trump-buying-us-patriot-missiles-249560">US president</a> eager for a more aggressive posture.

President Donald Trump has frequently criticized the Fed for not cutting rates more swiftly and significantly, with the Fed chair he appointed, Jerome Powell, the primary target of his ire.

The European Central Bank's decision on Thursday to cut interest rates and restart a larger stimulus program could further pressure the Fed to cut rates, as the ECB's move stands to weaken the euro against the dollar and thereby drive up the price of US exports - an issue that especially vexes Trump.

Powell, who will give a news conference after the central bank issues its statement, has made comments in the past that have shaken the market, including in July, when he said the bank's rate cut might not be the start of a lengthy easing campaign to shore up the economy.

"Every meeting has the ability for Jay Powell to say something that upsets markets a little bit,” said Arthur Hogan, chief market strategist at National Securities Corp.

Powell "has had enough practice to know that he does not want to move markets or make news,” he added.

Of the past eight easing cycles since 1981, four have been "insurance" cycles, when economic problems loom but the economy is not in a recession, while four were pre-recession cycles, according to research from Allianz Global Investors.

One year into an easing cycle, the S&amp;P 500 rose an average of 20.4 per cent during insurance cycles, while the index fell an average of 10.2 per cent during pre-recession cycles, according to Allianz.

"Historically, what they’re doing now, which is cutting rates in an economy that is not in a recession and not really in any imminent risk of a recession, has been positive for the stock market," said Mona Mahajan, US investment strategist at Allianz.

The stock market overall has typically responded well to a second rate cut, which Wednesday's would be, with the Dow Jones Industrial Average rising an average of 20.3 per cent one year later, according to Ned Davis Research. The weakest performance has come when the Fed tried and failed to prevent a recession.

The probability of a recession in the next 12 months is nearly 38 per cent, its highest in about a decade, according to the New York Fed's recession indicator, which is based on the US Treasury yield curve. Last month, yields on two-year US bonds exceeded those on 10-year notes, an inversion of the yield curve that is seen as an omen of recession.

An escalation in the US-China tariff war is contributing to economic uncertainty and is top among concerns for stock investors. Late last month, a key speech from Powell was upstaged when Trump issued tweets that heightened trade tensions.

“I do think it’s important that the Fed helps ease financial conditions and helps reduce the probability of recession," SunTrust's Lerner said. "If the tariff fight ratchets up more, then what the Fed does, the effect will be less.

With US-China trade tensions roiling markets, investors are counting on support for stocks coming from a Federal Reserve willing to keep cutting interest rates to help the US economy avoid a severe downturn.

With US-China trade tensions roiling markets, investors are counting on support for stocks coming from a Federal Reserve willing to keep cutting interest rates to help the US economy avoid a severe downturn. A quarter-point rate reduction is widely expected when the Fed issues its next policy statement on Wednesday, which would be the central bank's second such cut after lowering rates in July for the first time since 2008. That puts the greater focus on clues about how much further the Fed will go. “If the Fed gives forward guidance that suggests less than what the market is thinking, then you will probably see markets sell-off," said Jamie Cox, managing partner of Harris Financial Group in Richmond, Virginia. "So long as the Fed plays along with what markets are pricing in think markets will be very stable.” The Fed's 180-degree pivot from tightening monetary policy last year to easing it has helped drive the stock market's overall strong performance in 2019. The benchmark S&P 500 has climbed 20 per cent this year and is near all-time highs. The central bank in July cited signs of a global slowdown, simmering US-China trade tensions and a desire to boost too-low inflation as it lowered borrowing costs. Markets are pricing in a near 90 per cent probability that the Fed will shave another quarter-point from its current overnight lending rate of 2.00 per cent to 2.25 per cent, according to the CME Group's FedWatch tool. There is a roughly 65 per cent probability that the Fed makes at least one more quarter-point cut by the end of the year, according to FedWatch. "The market is going to want to see a focus that we have a cut and there is likely more coming," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "They want to know that the Fed is vigilant and will act aggressively if needed." That raises the importance of the newest set of policymakers' rate-path projections - the so-called dot plot - that will be released along with the rate decision. UBS economists said in a note they expect that will shift lower overall for 2019, but project only two cuts total for the year, which could irk both investors and a US president eager for a more aggressive posture. President Donald Trump has frequently criticized the Fed for not cutting rates more swiftly and significantly, with the Fed chair he appointed, Jerome Powell, the primary target of his ire. The European Central Bank's decision on Thursday to cut interest rates and restart a larger stimulus program could further pressure the Fed to cut rates, as the ECB's move stands to weaken the euro against the dollar and thereby drive up the price of US exports - an issue that especially vexes Trump. Powell, who will give a news conference after the central bank issues its statement, has made comments in the past that have shaken the market, including in July, when he said the bank's rate cut might not be the start of a lengthy easing campaign to shore up the economy. "Every meeting has the ability for Jay Powell to say something that upsets markets a little bit,” said Arthur Hogan, chief market strategist at National Securities Corp. Powell "has had enough practice to know that he does not want to move markets or make news,” he added. Of the past eight easing cycles since 1981, four have been "insurance" cycles, when economic problems loom but the economy is not in a recession, while four were pre-recession cycles, according to research from Allianz Global Investors. One year into an easing cycle, the S&P 500 rose an average of 20.4 per cent during insurance cycles, while the index fell an average of 10.2 per cent during pre-recession cycles, according to Allianz. "Historically, what they’re doing now, which is cutting rates in an economy that is not in a recession and not really in any imminent risk of a recession, has been positive for the stock market," said Mona Mahajan, US investment strategist at Allianz. The stock market overall has typically responded well to a second rate cut, which Wednesday's would be, with the Dow Jones Industrial Average rising an average of 20.3 per cent one year later, according to Ned Davis Research. The weakest performance has come when the Fed tried and failed to prevent a recession. The probability of a recession in the next 12 months is nearly 38 per cent, its highest in about a decade, according to the New York Fed's recession indicator, which is based on the US Treasury yield curve. Last month, yields on two-year US bonds exceeded those on 10-year notes, an inversion of the yield curve that is seen as an omen of recession. An escalation in the US-China tariff war is contributing to economic uncertainty and is top among concerns for stock investors. Late last month, a key speech from Powell was upstaged when Trump issued tweets that heightened trade tensions. “I do think it’s important that the Fed helps ease financial conditions and helps reduce the probability of recession," SunTrust's Lerner said. "If the tariff fight ratchets up more, then what the Fed does, the effect will be less.

Wall Street Week Ahead: With rate cut likely, market wonders how low Fed will go

Trade policy uncertainty driven by the Trump administration's escalating dispute with China means hundreds of billions of dollars in lost US output and as much as $850 billion lost globally through early next year, research published this week by the Federal Reserve suggests.

The Fed researchers analysed newspaper articles and corporate earnings calls to estimate trade policy uncertainty, finding it has recently "shot up to levels not seen since the 1970s."

Other economists, notably Stanford University professor Nicholas Bloom and his colleagues, have documented a similar rise in uncertainty

The Fed researchers then estimated the blow such uncertainty delivers to economic activity, as businesses pull back on investment and production. They concluded that globally and in the United States, its impact is around 1 per cent to GDP.

With US GDP estimated at about $20 trillion, and world GDP at about $85 trillion, a 1 per cent impact would put the drag from trade uncertainty at about $200 billion to US GDP, and $850 billion to global GDP, according to Reuters calculations.

The estimates, the researchers said, are uncertain.

But they are notable in that they are among the first to quantify the large impact of President Donald Trump's approach to trade deals, which he says put the US economy at a global disadvantage.

In an effort to win better trade terms, the Trump administration has jacked up tariffs on hundreds of billions of dollars of Chinese imports and imposed or threatened to impose duties on imports from other trading partners, including Mexico and the European Union. China and other countries in turn have threatened or imposed their own tariffs on US goods.

Trump has called on the Fed to slash US interest rates to support the economy and offset the effects of the trade war.

Fed policymakers for their part have said they will not let politics dictate interest-rate policy. But they have consistently called out the tariffs as detrimental to US growth. Fed Chair Jerome Powell last month cited trade policy uncertainty as an important reason for the global economic slowdown and weak US manufacturing.

Chicago Fed President Charles Evans on Wednesday argued that increased trade tensions could slow US potential growth to 1.5 per cent a year, half what Trump said his administration would deliver.

Trade policy uncertainty driven by the Trump administration's escalating dispute with China means hundreds of billions of dollars in lost US output and as much as $850 billion lost globally through early next year, research published this week by the Federal Reserve suggests.

Trade policy uncertainty driven by the Trump administration's escalating dispute with China means hundreds of billions of dollars in lost US output and as much as $850 billion lost globally through early next year, research published this week by the Federal Reserve suggests. The Fed researchers analysed newspaper articles and corporate earnings calls to estimate trade policy uncertainty, finding it has recently "shot up to levels not seen since the 1970s." Other economists, notably Stanford University professor Nicholas Bloom and his colleagues, have documented a similar rise in uncertainty The Fed researchers then estimated the blow such uncertainty delivers to economic activity, as businesses pull back on investment and production. They concluded that globally and in the United States, its impact is around 1 per cent to GDP. With US GDP estimated at about $20 trillion, and world GDP at about $85 trillion, a 1 per cent impact would put the drag from trade uncertainty at about $200 billion to US GDP, and $850 billion to global GDP, according to Reuters calculations. The estimates, the researchers said, are uncertain. But they are notable in that they are among the first to quantify the large impact of President Donald Trump's approach to trade deals, which he says put the US economy at a global disadvantage. In an effort to win better trade terms, the Trump administration has jacked up tariffs on hundreds of billions of dollars of Chinese imports and imposed or threatened to impose duties on imports from other trading partners, including Mexico and the European Union. China and other countries in turn have threatened or imposed their own tariffs on US goods. Trump has called on the Fed to slash US interest rates to support the economy and offset the effects of the trade war. Fed policymakers for their part have said they will not let politics dictate interest-rate policy. But they have consistently called out the tariffs as detrimental to US growth. Fed Chair Jerome Powell last month cited trade policy uncertainty as an important reason for the global economic slowdown and weak US manufacturing. Chicago Fed President Charles Evans on Wednesday argued that increased trade tensions could slow US potential growth to 1.5 per cent a year, half what Trump said his administration would deliver.

Trade uncertainty to trim $850 billion global output

US President Donald Trump said Friday that he would not stand in the way of beleaguered Federal Reserve chief Jerome Powell if he decided to quit.&nbsp;

Asked if he wants Powell to resign, Trump told reporters,&nbsp;"If he did, I wouldn't stop him."

Trump suggested earlier Friday that he regarded Powell as a bigger "enemy" than China, with whom he has been waging a trade war.

China announced Friday new tariffs on $75 billion in US products and President Donald Trump lashed out with threats of further retaliation, meaning the trade uncertainty that Powell said is exacerbating the global slowdown is unlikely to go away soon.

Trump lost no time in criticizing Powell -- and swiping at Beijing.

In a furious flurry of tweets, Trump attacked the Fed's stewardship of the world's biggest economy and vowed a quick response to China.

"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed," Trump tweeted after Powell's comments.

"My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?" Trump said, misspelling the Fed chief's name in an unprecedented attack on the independent central bank.

The Fed cut the benchmark interest rate last month for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy.

But in his hotly anticipated speech to an annual central banking conference in Jackson Hole, Wyoming, Powell cautioned that the Fed has no "rulebook" for dealing with the trade war fallout.

"The three weeks since our July FOMC meeting have been eventful, beginning with the announcement of new tariffs on imports from China," he said.

"The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States."

While Powell said the US economy "is now in a favorable place," it faces "significant risks" and he again pledged that the Fed "will act as appropriate to sustain the expansion."&nbsp;

However, he warned that there is no "settled rulebook for international trade ... no recent precedents to guide any policy response to the current situation."

US President Donald Trump said Friday that he would not stand in the way of beleaguered Federal Reserve chief Jerome Powell if he decided to quit. Asked if he wants Powell to resign, Trump told reporters, "If he did, I wouldn't stop him.

US President Donald Trump said Friday that he would not stand in the way of beleaguered Federal Reserve chief Jerome Powell if he decided to quit. Asked if he wants Powell to resign, Trump told reporters, "If he did, I wouldn't stop him." Trump suggested earlier Friday that he regarded Powell as a bigger "enemy" than China, with whom he has been waging a trade war. China announced Friday new tariffs on $75 billion in US products and President Donald Trump lashed out with threats of further retaliation, meaning the trade uncertainty that Powell said is exacerbating the global slowdown is unlikely to go away soon. Trump lost no time in criticizing Powell -- and swiping at Beijing. In a furious flurry of tweets, Trump attacked the Fed's stewardship of the world's biggest economy and vowed a quick response to China. "As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed," Trump tweeted after Powell's comments. "My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?" Trump said, misspelling the Fed chief's name in an unprecedented attack on the independent central bank. The Fed cut the benchmark interest rate last month for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy. But in his hotly anticipated speech to an annual central banking conference in Jackson Hole, Wyoming, Powell cautioned that the Fed has no "rulebook" for dealing with the trade war fallout. "The three weeks since our July FOMC meeting have been eventful, beginning with the announcement of new tariffs on imports from China," he said. "The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States." While Powell said the US economy "is now in a favorable place," it faces "significant risks" and he again pledged that the Fed "will act as appropriate to sustain the expansion." However, he warned that there is no "settled rulebook for international trade ... no recent precedents to guide any policy response to the current situation."

Trump says he  'wouldn't stop' if beleaguered Federal Reserve chief Jerome Powell decides to quit 

Trade war whiplash and other market themes for the week ahead

There is a dramatic shift in Fed monetary policy overnight. The US Federal Reserve cuts interest rate for the first time since the great recession of 2008. Watch this video to know more.

Dramatic shift in Federal Reserve monetary policy

Brewing <a href="https://www.wionews.com/business-economy/asia-stocks-higher-ahead-of-fed-pound-pressured-by-fresh-brexit-pain-239341">no-deal Brexit</a> worries sent the pound sinking towards a two-year low versus the euro and roughed up Irish bonds on Tuesday, while stock markets wilted before what is expected to be the first cut in rates since the financial crisis.

Europe's markets suffered a stormy start as the pound followed its worst day of the year with another 0.5% swoon against all the major currencies.

A blizzard of fiery talk on Monday that included the new UK Prime Minister Boris Johnson called his predecessor's Brexit plans dead and its new foreign minister labelling the European Union "stubborn" kept the slide intact.

<a href="https://www.wionews.com/world/uk-plays-brexit-hardball-with-stubborn-european-union-pound-falls-to-a-two-year-low-239235">Sterling fell</a> as far as $1.2120, which was its lowest against the dollar since March 2017, and to 91.85 pence per euro, the weakest since September 2017.

Options markets were pointing to more pain too. Three-month implied volatility, a contract that expires just before the October&nbsp;31 Brexit deadline, jumped to over 11 vols, the highest since before March 29, the original date for Britain to leave the European Union.

"The pound is in a very precarious state, it is as simple as that," said TD Securities' European head of currency strategy Ned Rumpeltin.

"We are now in a different regime," he said, referring to Johnson's explicit agenda of taking Britain out of the EU, whether or not transitional trading agreements are in place.

It was not just sterling reeling either.

Irish government bond yield spreads over Germany hit their widest levels in over a month at 24 basis points, on worries about the damage a no-deal Brexit would do to Ireland's economy.

Other eurozone government bond yields were holding near recent lows ahead of the Federal Reserve meeting which is expected to deliver a 25 basis point rate cut on Wednesday and potentially signal more on the way.

Germany's 10-year government bond yield was hovering near the minus 0.40% mark.

European shares slipped as grim forecasts from German chemicals and drugs giant Bayer and airline Lufthansa soured sentiment, although the weakness of the pound kept London's blue-chip FTSE index just about out of the red.

With concerns about global growth still bubbling among investors, a GfK survey also showed German consumer morale worsening for the third month in a row heading into August as trade disputes bit in Europe's biggest exporter.

"Most markets are down this morning," said Simona Gambarini, a markets economist at Capital Economics. "The S&amp;P closed lower yesterday. We have a few data releases regarding the eurozone that could push equity prices down but I think everyone is waiting for the Fed meeting."

Aussie Gold

Asia had been a bit more positive overnight.

Japan's Nikkei rose 0.4%, showing a limited reaction to the Bank of Japan's widely anticipated decision to stand pat on monetary policy. Shanghai rose 0.3% and Hong Kong's Hang Seng edged up 0.2%.

Australian stocks stole the glory again though with another record high, as buoyant mining shares added to tech-driven gains the previous day.

The BOJ added that it would ease policy again "without hesitation" if the economy loses momentum for achieving the central bank's 2% inflation target.

Also drawing some attention were US-China trade negotiations which begin in Shanghai on Tuesday, although expectations for progress during the two-day meeting are low with the markets hoping the two sides can at least detail commitments for "goodwill" gestures.

Among commodities, crude oil prices extended the previous day's gains, with the Fed's expected easing fuelling optimism that it would boost the economy and fuel demand in the world's biggest oil consumer.

US crude futures were up 0.65% at $57.24 per barrel and Brent crude added 0.6% to $64.09. Gold was down 0.1% at $1,425 per ounce.

Brewing no-deal Brexit worries sent the pound sinking towards a two-year low versus the euro and roughed up Irish bonds on Tuesday, while stock markets wilted before what is expected to be the first cut in rates since the financial crisis.

Brewing no-deal Brexit worries sent the pound sinking towards a two-year low versus the euro and roughed up Irish bonds on Tuesday, while stock markets wilted before what is expected to be the first cut in rates since the financial crisis. Europe's markets suffered a stormy start as the pound followed its worst day of the year with another 0.5% swoon against all the major currencies. A blizzard of fiery talk on Monday that included the new UK Prime Minister Boris Johnson called his predecessor's Brexit plans dead and its new foreign minister labelling the European Union "stubborn" kept the slide intact. Sterling fell as far as $1.2120, which was its lowest against the dollar since March 2017, and to 91.85 pence per euro, the weakest since September 2017. Options markets were pointing to more pain too. Three-month implied volatility, a contract that expires just before the October 31 Brexit deadline, jumped to over 11 vols, the highest since before March 29, the original date for Britain to leave the European Union. "The pound is in a very precarious state, it is as simple as that," said TD Securities' European head of currency strategy Ned Rumpeltin. "We are now in a different regime," he said, referring to Johnson's explicit agenda of taking Britain out of the EU, whether or not transitional trading agreements are in place. It was not just sterling reeling either. Irish government bond yield spreads over Germany hit their widest levels in over a month at 24 basis points, on worries about the damage a no-deal Brexit would do to Ireland's economy. Other eurozone government bond yields were holding near recent lows ahead of the Federal Reserve meeting which is expected to deliver a 25 basis point rate cut on Wednesday and potentially signal more on the way. Germany's 10-year government bond yield was hovering near the minus 0.40% mark. European shares slipped as grim forecasts from German chemicals and drugs giant Bayer and airline Lufthansa soured sentiment, although the weakness of the pound kept London's blue-chip FTSE index just about out of the red. With concerns about global growth still bubbling among investors, a GfK survey also showed German consumer morale worsening for the third month in a row heading into August as trade disputes bit in Europe's biggest exporter. "Most markets are down this morning," said Simona Gambarini, a markets economist at Capital Economics. "The S&P closed lower yesterday. We have a few data releases regarding the eurozone that could push equity prices down but I think everyone is waiting for the Fed meeting." Aussie Gold Asia had been a bit more positive overnight. Japan's Nikkei rose 0.4%, showing a limited reaction to the Bank of Japan's widely anticipated decision to stand pat on monetary policy. Shanghai rose 0.3% and Hong Kong's Hang Seng edged up 0.2%. Australian stocks stole the glory again though with another record high, as buoyant mining shares added to tech-driven gains the previous day. The BOJ added that it would ease policy again "without hesitation" if the economy loses momentum for achieving the central bank's 2% inflation target. Also drawing some attention were US-China trade negotiations which begin in Shanghai on Tuesday, although expectations for progress during the two-day meeting are low with the markets hoping the two sides can at least detail commitments for "goodwill" gestures. Among commodities, crude oil prices extended the previous day's gains, with the Fed's expected easing fuelling optimism that it would boost the economy and fuel demand in the world's biggest oil consumer. US crude futures were up 0.65% at $57.24 per barrel and Brent crude added 0.6% to $64.09. Gold was down 0.1% at $1,425 per ounce.

Stormy sterling sinks again, stocks wilt before Fed

Global shares steadied on Monday and the dollar hit a two-month high against a basket of currencies as markets counted down to a likely cut in US interest rates this week, with much riding on whether the <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/asian-shares-drift-into-trade-talks-fed-test-239118&amp;sa=U&amp;ved=2ahUKEwiskeK2ktrjAhVFsY8KHaKRDH0QFjABegQIDBAC&amp;usg=AOvVaw007h4SGYlL7z1dT2b0Kwqf">Federal Reserve</a>&nbsp;signals more cuts will follow.

After opening lower, European shares began to gain. Deal-making and a rally in defensive sectors pushed the pan-European STOXX 600 index up 0.3%.

The dollar index - which measures it against a basket of peers - was higher by 0.1% and at its highest since May 31.

A stronger-than-expected US gross domestic product report on Friday gave the dollar wings, leading some investors to doubt whether the Fed will continue easing this year after its Wednesday meeting.

Interest rate futures are fully priced for a quarter-point rate cut from the Fed on Wednesday, with only a small chance of a half-point move.

More important will be what the central bank flags for the future, given the market implies 100 basis points of easing over the next year or so.

MSCI's All-Country World Index of stocks, down by as much as 0.2% on the day, erased some losses to trade 0.02% lower. Wall Street futures were flat.

"Central banks are very much the focus of attention for markets at the moment," said Rupert Thompson, head of research at Kingswood.

Investors were also keeping an eye on US-China trade talks. US and Chinese negotiators meet in Shanghai this week for their first in-person talks since a G20 truce last month, but expectations for a breakthrough are low.

Data on the weekend showed profits earned by China's industrial firms contracted in June, fuelling concerns that the trade war will drag on economic growth.

"Both parties know they are running out of time to prevent a sharper slowdown in the global economy. However, given the past experiences, investor sentiment isn’t too high," said Hussein Sayed, chief market strategist at FXTM.

"While resolving their core issues seems far from reach at this stage, especially when it comes to China's subsidies and technology transfers, markets need at least a sign of goodwill to prevent a sharp, volatile reaction..."

In Asia, MSCI's broadest index of Asia-Pacific shares was half a per cent lower. Japan's Nikkei dipped 0.2% and Shanghai blue chips 0.1%.

In bonds, eurozone bond yields dipped as jittery investors eyed the trade talks and waited for the likely Fed rate cut after the European Central Bank's dovish signalling last week disappointed some.

The benchmark German 10-year Bund yield fell more than 1 basis point to -0.3920%, not far from last week's record low of -0.422%.

Elsewhere in currencies, <a href="https://www.wionews.com/world/uk-plays-brexit-hardball-with-stubborn-european-union-pound-falls-to-a-two-year-low-239235">sterling fell</a> over half a per cent to a 28-month low of $1.2301 amid reports the government of Prime Minister Boris Johnson was preparing the ground for a "no-deal" Brexit.

Global shares steadied on Monday and the dollar hit a two-month high against a basket of currencies as markets counted down to a likely cut in US interest rates this week, with much riding on whether the Federal Reserve signals more cuts will follow.

Global shares steadied on Monday and the dollar hit a two-month high against a basket of currencies as markets counted down to a likely cut in US interest rates this week, with much riding on whether the Federal Reserve signals more cuts will follow. After opening lower, European shares began to gain. Deal-making and a rally in defensive sectors pushed the pan-European STOXX 600 index up 0.3%. The dollar index - which measures it against a basket of peers - was higher by 0.1% and at its highest since May 31. A stronger-than-expected US gross domestic product report on Friday gave the dollar wings, leading some investors to doubt whether the Fed will continue easing this year after its Wednesday meeting. Interest rate futures are fully priced for a quarter-point rate cut from the Fed on Wednesday, with only a small chance of a half-point move. More important will be what the central bank flags for the future, given the market implies 100 basis points of easing over the next year or so. MSCI's All-Country World Index of stocks, down by as much as 0.2% on the day, erased some losses to trade 0.02% lower. Wall Street futures were flat. "Central banks are very much the focus of attention for markets at the moment," said Rupert Thompson, head of research at Kingswood. Investors were also keeping an eye on US-China trade talks. US and Chinese negotiators meet in Shanghai this week for their first in-person talks since a G20 truce last month, but expectations for a breakthrough are low. Data on the weekend showed profits earned by China's industrial firms contracted in June, fuelling concerns that the trade war will drag on economic growth. "Both parties know they are running out of time to prevent a sharper slowdown in the global economy. However, given the past experiences, investor sentiment isn’t too high," said Hussein Sayed, chief market strategist at FXTM. "While resolving their core issues seems far from reach at this stage, especially when it comes to China's subsidies and technology transfers, markets need at least a sign of goodwill to prevent a sharp, volatile reaction..." In Asia, MSCI's broadest index of Asia-Pacific shares was half a per cent lower. Japan's Nikkei dipped 0.2% and Shanghai blue chips 0.1%. In bonds, eurozone bond yields dipped as jittery investors eyed the trade talks and waited for the likely Fed rate cut after the European Central Bank's dovish signalling last week disappointed some. The benchmark German 10-year Bund yield fell more than 1 basis point to -0.3920%, not far from last week's record low of -0.422%. Elsewhere in currencies, sterling fell over half a per cent to a 28-month low of $1.2301 amid reports the government of Prime Minister Boris Johnson was preparing the ground for a "no-deal" Brexit.

Shares steady as Fed comes into focus; dollar at two-month high

<a href="https://www.wionews.com/business-economy/sensex-gains-over-300-points-nifty-past-11750-228541">The BSE Sensex</a> rallied 489 points Thursday, driven by gains in banking, healthcare and auto stocks, amid strong cues from the global markets after the US Federal Reserve hinted at a rate cut shortly.

After gyrating over 700 points during the day, the BSE gauge settled 488.89 points or 1.25 per cent, higher at 39,601.63. The index hit an intra-day high of 39,638.64 and a low of 38,933.78.

Similarly, the broader NSE Nifty closed 140.30 points or 1.20 per cent, higher at 11,831.75. During the day, the index touched a high of 11,843.50 and a low of 11,635.05.

Yes, Bank was the biggest gainer in the Sensex pack, rallying 10.94 per cent.

Other gainers included Sun Pharma, IndusInd Bank, L&amp;T, ICICI Bank, Maruti, Bajaj Auto, Tata Motors and ONGC, rallying up to 4.01 per cent.

HUL, HDFC Bank, ITC and NTPC were the only losers in the index, shedding up to 0.26 per cent.

Meanwhile, shares of Jet Airways witnessed a massive rebound, ending 93 per cent higher, after taking nearly 90 per cent in the past 13 sessions.

According to experts, domestic investors took cues from firm global markets that rallied after the US Federal Reserve's policy outcome. 
The US central bank Wednesday left the interest rates unchanged but indicated it will not hesitate to cut rates to boost the economy amid growing uncertainties.

Bourses in Shanghai, Hong Kong, Tokyo, and Seoul ended significantly higher. Equity markets in Europe too were trading in the green in early deals.

Hopes of a breakthrough in US-China trade talks too boosted global investor sentiment, traders said.

On the currency front, the Indian rupee appreciated 11 paise to 69.57 against the US dollar intra-day.

Brent crude futures, the global oil benchmark, rose 2.67 percent to USD 63.47 per barrel amid a flare-up in geopolitical tensions in the Middle East.&nbsp;

The BSE Sensex rallied 489 points Thursday, driven by gains in banking, healthcare and auto stocks, amid strong cues from the global markets after the US Federal Reserve hinted at a rate cut shortly.

The BSE Sensex rallied 489 points Thursday, driven by gains in banking, healthcare and auto stocks, amid strong cues from the global markets after the US Federal Reserve hinted at a rate cut shortly. After gyrating over 700 points during the day, the BSE gauge settled 488.89 points or 1.25 per cent, higher at 39,601.63. The index hit an intra-day high of 39,638.64 and a low of 38,933.78. Similarly, the broader NSE Nifty closed 140.30 points or 1.20 per cent, higher at 11,831.75. During the day, the index touched a high of 11,843.50 and a low of 11,635.05. Yes, Bank was the biggest gainer in the Sensex pack, rallying 10.94 per cent. Other gainers included Sun Pharma, IndusInd Bank, L&T, ICICI Bank, Maruti, Bajaj Auto, Tata Motors and ONGC, rallying up to 4.01 per cent. HUL, HDFC Bank, ITC and NTPC were the only losers in the index, shedding up to 0.26 per cent. Meanwhile, shares of Jet Airways witnessed a massive rebound, ending 93 per cent higher, after taking nearly 90 per cent in the past 13 sessions. According to experts, domestic investors took cues from firm global markets that rallied after the US Federal Reserve's policy outcome. The US central bank Wednesday left the interest rates unchanged but indicated it will not hesitate to cut rates to boost the economy amid growing uncertainties. Bourses in Shanghai, Hong Kong, Tokyo, and Seoul ended significantly higher. Equity markets in Europe too were trading in the green in early deals. Hopes of a breakthrough in US-China trade talks too boosted global investor sentiment, traders said. On the currency front, the Indian rupee appreciated 11 paise to 69.57 against the US dollar intra-day. Brent crude futures, the global oil benchmark, rose 2.67 percent to USD 63.47 per barrel amid a flare-up in geopolitical tensions in the Middle East.

Sensex soars 489 points as dovish Fed lifts global markets

US President Donald Trump again lashed out at the Federal Reserve on Monday for considering raising interest rates, on the eve of a meeting at which policymakers are widely expected to do so.

The latest Twitter outburst renewed the president's rock throwing at the central bank, which he accuses of undermining his economic agenda of tax cuts, slashed regulations and multi-front trade offensives.

Trump has repeatedly broken with the norms respected by US presidents in recent decades, hammering the central bank this year over its move away from the zero interest rate policy implemented during the global financial crisis.

"It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike," Trump wrote, in a message sent one hour before stock markets were due to open.

"Take the Victory!"

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<blockquote class="twitter-tweet" data-lang="en">
It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1074657278974939138?ref_src=twsrc%5Etfw">December 17, 2018</a></blockquote>
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As the US economy has recovered, the Fed has been raising the benchmark lending rate gradually since December 2015.

The Fed on Tuesday opens its final two-day policy meeting of 2018, and is widely expected to raise the key rate for the fourth time this year, working to get ahead of expected gains in inflation.

Trump has called the central bank "crazy," "out of control" and a greater economic threat than China, which the president blames for hollowing out American industry through unfair trade.

But analysts and former Fed members say Trump's unprecedented vitriol could cause the central bank to try to prove its independence by raising rates even if policymakers might otherwise have held off.

Staying out of politics 
Inflation is holding right around the Fed's two percent target but if markets believe the Fed can be swayed by political pressure, inflation fears could ignite and become a more serious problem.

White House trade advisor Peter Navarro on Monday said the bank should avoid this urge.&nbsp;

Current economic policy, such as tax cuts and de-regulation, have produced "supply-side positive shocks" that were holding inflation down, he said, also pointing out that the Fed was winding down a bond-buying stimulus program.

"All of those things have led us to a world where we have zero inflation for all practical purposes," Navarro told CNBC.

"The only argument I'm hearing for the Fed to raise rates is that somehow they have to exert their independence from the White House. Now, this is a bad argument."

Policymakers have offered little reaction to Trump's string of taunts, with Fed Chairman Jerome Powell saying the political noise does not factor into their decisions.&nbsp;

Amid brisk economic expansion after a decade of steady job growth, US unemployment is flirting with a 50-year low but the US economy is expected to slow.

And with global economy also weakening, there is a growing feeling the central bank will not have to raise rates as much as previously expected next year.

Powell and other officials in recent weeks have suggested they could show patience in 2019 as they study incoming economic data.

Futures markets currently put the odds of a rate hike this week at about 80 percent.

Wall Street opened sharply lower following Trump's tweet but had pared much of its losses around 1630 GMT.

US President Donald Trump again lashed out at the Federal Reserve on Monday for considering raising interest rates, on the eve of a meeting at which policymakers are widely expected to do so.

US President Donald Trump again lashed out at the Federal Reserve on Monday for considering raising interest rates, on the eve of a meeting at which policymakers are widely expected to do so. The latest Twitter outburst renewed the president's rock throwing at the central bank, which he accuses of undermining his economic agenda of tax cuts, slashed regulations and multi-front trade offensives. Trump has repeatedly broken with the norms respected by US presidents in recent decades, hammering the central bank this year over its move away from the zero interest rate policy implemented during the global financial crisis. "It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike," Trump wrote, in a message sent one hour before stock markets were due to open. "Take the Victory!" It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory! — Donald J. Trump (@realDonaldTrump) December 17, 2018 × As the US economy has recovered, the Fed has been raising the benchmark lending rate gradually since December 2015. The Fed on Tuesday opens its final two-day policy meeting of 2018, and is widely expected to raise the key rate for the fourth time this year, working to get ahead of expected gains in inflation. Trump has called the central bank "crazy," "out of control" and a greater economic threat than China, which the president blames for hollowing out American industry through unfair trade. But analysts and former Fed members say Trump's unprecedented vitriol could cause the central bank to try to prove its independence by raising rates even if policymakers might otherwise have held off. Staying out of politics Inflation is holding right around the Fed's two percent target but if markets believe the Fed can be swayed by political pressure, inflation fears could ignite and become a more serious problem. White House trade advisor Peter Navarro on Monday said the bank should avoid this urge. Current economic policy, such as tax cuts and de-regulation, have produced "supply-side positive shocks" that were holding inflation down, he said, also pointing out that the Fed was winding down a bond-buying stimulus program. "All of those things have led us to a world where we have zero inflation for all practical purposes," Navarro told CNBC. "The only argument I'm hearing for the Fed to raise rates is that somehow they have to exert their independence from the White House. Now, this is a bad argument." Policymakers have offered little reaction to Trump's string of taunts, with Fed Chairman Jerome Powell saying the political noise does not factor into their decisions. Amid brisk economic expansion after a decade of steady job growth, US unemployment is flirting with a 50-year low but the US economy is expected to slow. And with global economy also weakening, there is a growing feeling the central bank will not have to raise rates as much as previously expected next year. Powell and other officials in recent weeks have suggested they could show patience in 2019 as they study incoming economic data. Futures markets currently put the odds of a rate hike this week at about 80 percent. Wall Street opened sharply lower following Trump's tweet but had pared much of its losses around 1630 GMT.

US central bank expected to raise rates Tuesday, Trump lashes out at it

US President Donald Trump launched a fresh assault Tuesday against Federal Reserve chairman Jerome Powell, saying he threatened economic growth and seemed to enjoy raising interest rates.

In an interview with the Wall Street Journal, Trump hinted that he regretted nominating Powell in the first place.

"Every time we do something great, he raises the interest rates," Trump told the Journal.

He "almost looks like he's happy raising interest rates," the president added.

The criticism comes after <a href="http://www.wionews.com/world/trump-widens-fed-critique-calls-it-my-biggest-threat-172018">Trump last week called the Federal Reserve his "biggest threat"</a> and said Powell was moving "too fast" in hiking rates.&nbsp;

The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating, and it is widely expected to raise rates again by 0.25 per cent in December.

US presidents usually remain silent on such issues in respect toward the Fed's independence. Trump has previously called Fed policies "crazy."

Trump told the Journal it was "too early to say, but maybe" he regretted nominating Powell for the four-year term he started in February. 
"He was supposed to be a low-interest-rate guy. It's turned out that he's not," Trump added.

It is unclear whether the president would have the authority to remove Powell.

The Federal Reserve Act says the president can remove Fed governors "for cause," but that provision does not apply to the chairman, according to the Journal.

Trump said the Fed poses the biggest risk to the US economy, adding that higher interest rates would slow growth and add to the national debt.

"To me the Fed is the biggest risk, because I think interest rates are being raised too quickly," Trump said.

US growth reached 4.2 per cent year-on-year in the second quarter, its strongest pace in four years.

On Friday, the government is set to publish the first estimate for the third quarter, which is expected to be 3.3 per cent, according to analysts.

US President Donald Trump launched a fresh assault Tuesday against Federal Reserve chairman Jerome Powell, saying he threatened economic growth and seemed to enjoy raising interest rates.

US President Donald Trump launched a fresh assault Tuesday against Federal Reserve chairman Jerome Powell, saying he threatened economic growth and seemed to enjoy raising interest rates. In an interview with the Wall Street Journal, Trump hinted that he regretted nominating Powell in the first place. "Every time we do something great, he raises the interest rates," Trump told the Journal. He "almost looks like he's happy raising interest rates," the president added. The criticism comes after Trump last week called the Federal Reserve his "biggest threat" and said Powell was moving "too fast" in hiking rates. The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating, and it is widely expected to raise rates again by 0.25 per cent in December. US presidents usually remain silent on such issues in respect toward the Fed's independence. Trump has previously called Fed policies "crazy." Trump told the Journal it was "too early to say, but maybe" he regretted nominating Powell for the four-year term he started in February. "He was supposed to be a low-interest-rate guy. It's turned out that he's not," Trump added. It is unclear whether the president would have the authority to remove Powell. The Federal Reserve Act says the president can remove Fed governors "for cause," but that provision does not apply to the chairman, according to the Journal. Trump said the Fed poses the biggest risk to the US economy, adding that higher interest rates would slow growth and add to the national debt. "To me the Fed is the biggest risk, because I think interest rates are being raised too quickly," Trump said. US growth reached 4.2 per cent year-on-year in the second quarter, its strongest pace in four years. On Friday, the government is set to publish the first estimate for the third quarter, which is expected to be 3.3 per cent, according to analysts.

Trump launches fresh attack against Fed chairman

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