Trump's attacks on the Fed could backfire, says former official

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"Monetary policy should pay attention to indicators of financial market stability or excess", Stein, now at Harvard University, said in an email. Others said that, to avoid creating asset bubbles or having inflation run above the Fed's two-percent target for too long, the central bank would have to raise rates "above their assessments of its longer-run level.' Still, a 'couple" of participants said they would oppose this unless clear danger signs - an overheating economy and mounting inflation - were to arise.

The People's Bank of China governor Yi Gang said that China's stock valuations are not in line with sound economic fundamentals, and that the central bank will roll out targeted measures to help ease corporate financing problems and encourage commercial banks to boost lending to private firms. "He didn't do that".

The 30-year bond last fell 15/32 in price to yield 3.3713 percent, from 3.346 percent late on Wednesday. There are some four-week bills, some 13-week bills, some 10-year notes, and so forth. Responding to a moderator question, he said he thinks the Fed could nudge rates higher "for a period of time" without moving into restrictive territory.

In addition, business investment climbed 10 per cent in the first half of the year, which suggests productivity will rise, allowing the economy to continue to grow without fueling inflation and while attracting more workers into the labor pool, he told the Economic Club of NY. "We control what we do at the Fed".

US authorities are concerned when any nation devalues its currency because it gives that nation's exporters a competitive price advantage over their USA rivals. Rates are still at historical lows but investors have been spooked by tariffs, more debt issuance by the Treasury, and inflation concerns. As shown below, most recessions happen at a time when interest rates are rising. And that figure has recently hit a six-year high of $779 billion for the fiscal year that ended September 30.

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Asked if he thinks the current path of rate hikes is threatening economic growth, Quarles said it depends on one's expectations about the US economic trajectory. He is on record urging the central bank to focus on "what's good for the country" instead of raising rates, which can hurt consumers because it increases the costs of borrowing.

In its semi-annual currency report, the US Treasury Department said a recent depreciation of China's yuan currency would probably exacerbate the US trade deficit, but US officials found Beijing appeared to be doing little to directly intervene in the currency's value.

Worries over rising US rates and a stronger dollar added to the sour tone, as well as the effect of a trade war between Washington and Beijing. That would put it above the 3 percent level which the Fed now pegs as its "neutral rate". "It's like a failsafe trigger".

USA stocks fell on Thursday as weak earnings reports from industrials raised worries about rising expenses and the impact of tariffs, adding to concerns over higher borrowing costs after hawkish commentary in the Federal Reserve's minutes.

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