Federal Reserve policymakers in favour of ‘restrictive’ policy

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At the September meeting, the Fed boosted its key policy rate for a third time this year. Despite the rate increases since 2015, the stance of monetary policy is still accommodative.

While the central bank's structure insulates it from day-to-day politics, there are levers for exerting presidential influence or for bypassing the Fed altogether. Similarly, the central bank can tighten the economy and lower the economic growth rate. There was some worry when rates were at record lows that the Fed couldn't lower them any more to try to stimulate the economy. As governments care about their approval ratings and reelection chances, they might be incentivized to compromise long-term economic health for strong short-term growth figures.

Shanghai dived 1.7 percent as already strained relations between China and the USA took another hit after the White House said it plans to withdraw from an global treaty on postal rates in a move aimed at pressuring Beijing.

Economists expect the Fed to shrug off White House pressure and continue slowly raising rates, which remain historically low.

Lower-than-expected United Kingdom inflation data weighed on sterling, which gave up the previous day's gains.

This is because markets tend to "buy the rumour and sell the fact", which means that once an end to the Federal Reserve's rate hiking cycle is just around the corner, traders would be most likely to dump the Dollar anyway. As other regions such as the Eurozone get closer to rate increases, the relative opportunities may shift in Europe's favor. This happened even as USA crude production slipped last week, partly as offshore facilities closed temporarily for Hurricane Michael.

NO: The Fed is an independent body and they are making decisions on what they think the market can handle. By "him", Trump referred to Fed Chairman Jerome Powell.

"Certainly other factors are at play as well - China being down 2.9 percent, the Italian budget debate and potential spillover implications for the global economy, etc", he said.

"It's going too fast, because you look at the last inflation numbers - they're very low", he said.

"I'm not blaming anybody, I put him there", Trump responded.

As opposed to a mild brake on the economy, Bullard argued that rates that high "would be moving quite a ways into restrictive territory". The most recent increase was in September.

The minutes did not indicate that officials reached a conclusion. The US dollar has strengthened against the yuan in recent months, prompting speculation that this month's report might contain formal claims of manipulation.

The prospect of a more hawkish Fed was exacerbating equity investor fears of uncertainties, ranging from the US-China trade war and weakness in the housing market to the outlook for earnings, said McMillan.

Bullard has been the most dovish Fed official the past two years. Auto loan rates are at a nine-year high, and 30-year fixed mortgage rates recently climbed to their highest level in seven years. Earlier this month, Powell said it was "a reasonable question" when a journalist asked if the economy was too good to be true.