President Donald Trump said he was ready to impose tariffs on all $500 billion of imported goods from China, remarks that sent the U.S. stock market and dollar retreating and threatened to escalate a trade clash with the Asian giant.
The reference is to the dollar amount of Chinese imports the USA accepted in 2017 - $505.5 billion to be exact, compared to the $129.9 billion the US exported to China, according to Census Bureau data.
Trump said that raising American interest rates makes investment in China comparatively attractive, because China manipulates its currency by artificially devaluing it.
President Donald Trump has said he is "not happy" about the fact that the US Federal Reserve is raising interest rates.
The rare rebuke was likely to stir a backlash as it broke with the long-established practice of the executive branch not commenting on the Federal Reserve's decisions out of respect for its independence.
Breaking with tradition to avoid criticizing the Fed, Trump told CNBC he's anxious that the central bank's policies will cancel out his efforts to speed up the economy.
The CNBC interview will air in its entirety Friday but the network released excerpts Thursday.
In the meantime, currency traders may need to pay closer attention to the president's Twitter feed.
It's always been speculated that the taboo of commenting on USA monetary policy could change under Trump, who slammed the Fed during his election campaign and has demonstrated repeatedly his willingness to flout the conventions and sensibilities of establishment Washington. European auto shares fell on Friday in response to Trump's China comments. "I want them to do well", he said.
Trump criticized the USA central bank in comments aired Thursday, saying its course of interest rate increases counteracted his efforts at growing the economy.
"We're down a tremendous amount", Trump said in the interview, which was recorded on Thursday, about trade imbalances with China.
The US imported $505 billion worth of goods from China in 2017, according to Census Bureau data.
Trump tapped Powell, who had served as a governor at the USA central bank, to serve at its helm following Janet Yellen.
"The escalating trade war, if it goes badly, could be a risk for the USA economy", Bullard said, adding he understands the policy's objective.
In the interview, he raised the concern that higher interest rates would put the U.S.at a "disadvantage", while the European Central Bank and Bank of Japan keep their rates low.
The Fed has raised interest rates twice already this year.
The question is whether Trump's remarks mark the beginning of a new era of greater US intervention, one in which the president and members of his cabinet feel free to weigh in on economic issues that were traditionally seen as outside the political domain. But JPMorgan economist Michael Feroli advanced an interesting alternate theory: Trump's comments may inspire the Fed to go the other direction. The Fed is charged with keeping prices stable, often by raising interest rates to prevent the economy from overheating. Greenspan did lower rates 13 times over 1991-92, but slowed the pace of cuts in the latter year, much to the White House's annoyance.