Federal Reserve policymakers in favour of ‘restrictive’ policy

Under Jerome Powell the Fed has been gradually raising rates as the US economy has strengthened as a way to prevent a run-up in inflation

Trump told Reuters in August he was "not thrilled" with Fed Chair Jerome Powell for raising interest rates, and has since escalated his criticism, this week saying the central bank is his "biggest threat", and last week calling the Fed "crazy", "loco", "ridiculous", and "too cute".

Every Fed policymaker backed the central bank's September decision to raise the target policy rate to between 2 percent and 2.25 percent, according to minutes of the Sept. 25-26 meeting, published Wednesday.

As well as making life more hard for United States exporters, a stronger greenback also raises the borrowing costs of many heavily-indebted emerging market economies, such as those in Latin America which have high levels of dollar-denominated borrowing.

The U.S. economy has been growing more quickly this year than many economists believe is possible without generating higher inflation, with the jobless rate at its lowest level in decades. "There's a couple of other people there that I'm not so happy with, too, but for the most part, I'm very happy with people".

The Fed has raised interest rates three times this year as it seeks to prevent a vibrant economy from overheating.

This would move USA interest rates slightly above what policymakers say is "neutral" - that is, neither slowing nor speeding the economy - but some participants said the Fed would need to go even further than that.

According to the minutes: "A few participants expected that policy would need to become modestly restrictive for a time and a number judged that it would be necessary to temporarily raise the federal funds rate above their assessments of its longer-run level".

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Meanwhile, the Fed took notice of clouds forming on the horizon.

Republican U.S. Representative Jeb Hensarling, who is set to retire as chairman of the House of Representatives Financial Services Committee that oversees the central bank, said Trump "clearly has his own style".

Stronger US currency makes American exports more costly to foreign buyers, possibly weighing on growth, and makes many debt payments more costly for foreign borrowers.

While the Fed's policy outlook suggested the US economy was humming along nicely, the spectre of rising dollar yields, which along with trade tensions were at the centre of last week's global equities rout, dented appetite for risk.

Higher rates can impact consumers by increasing borrowing costs, which have already ticked higher.

Wall Street, which had struggled through much of the day, closed slightly lower, with stocks paring losses after the minutes' release.

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