Fed ready to hike again if economy remains on track

It is worth noting that despite Trump's criticism of Powell's rate hike plan, the markets are still discounting 75 basis points of hiking by December 2019.

That appears to be a reference to when Donald Trump's second term as president would end. "And I think the euro is being manipulated also", Trump said.

He was surprised that Powell has continued his predecessor's policy of gradually raising interest rates, according to reports. Trump nominated Powell past year to replace former Fed Chair Janet Yellen.

Almost eight in 10 economists believe the Fed's interest rate policies are "about right", according to a survey released Monday by the National Association for Business Economics.

"What Trump is anxious about is that the Fed has, in my own words, growth phobia", Stephen Moore, a Republican economic commentator who advised Mr. Trump during the 2016 presidential campaign, told the Wall Street Journal. He voted in lockstep with Yellen, who also supported gradual rate hikes in her final years leading the Fed.

The Fed has raised interest rates twice this year already and is expected to do so again next month with consumer price inflation rising to 2.9 percent in July, its highest level in six years, and unemployment at 3.9 percent, the lowest level in about 20 years.

A Chinese central bank official said on Tuesday that China had taken note of the United States comments on the yuan, and said the two sides should communicate on the issue. That's the highest in 11 years. Powell, a Republican, has repeatedly said that he believes in the Fed's independence and that he and his colleagues that set interest rates will not bow to outside pressure.

Fed officials at the July 31-Aug.

"We do our work in a strictly nonpolitical way, based on detailed analysis, which we put on the record transparently, and we don't take political considerations into account", Powell said in the interview.

"Am I happy with my choice?"

When Trump was asked if he believed in the Fed's independence, he refused to say yes, telling the reporter: "I believe in the Fed doing what's good for the country". Powell may update his outlook when he gives a speech Friday on "Monetary Policy in a Changing Economy" at the Kansas City Fed's annual forum in Jackson Hole, Wyoming. Trump said to Reuters about Powell.

In addition to picking Powell as Fed chair, Trump has appointed one other board member, Randal Quarles, and has nominated three others to the panel, two of whom are expected to be confirmed soon by the Senate.

After sliding to a two-year low of 15.70 last week as the Turkish crisis triggered a broad flight from emerging markets, the rand has regained some ground, advancing around 8% in the last seven days as the greenback's rally faltered.

  • Eleanor Harrison