interest rates

[sjay]

Dollar is getting weaker and interest rates are dropping at the same time,how can that be?

 

[oldfart]

Short term interest rates are a function of Fed OMO policy; a fiat (i.e. a product of domestic monetary policy). The exchange rate is a function of relative interest rates and trade flows (an interaction of policies of multiple nations). Not much reason they have to move in any particular relationship to each other.

 

[sealybobo]

Dollar is getting weaker and interest rates are dropping at the same time,how can that be?

Didn't Republican make fun of Obama and say that he had to keep interest rates low or his economy would have fallen apart?

So I've been hoping they will raise interest rates now that Trump is president but so far the same old shit

Federal Reserve Leaves Interest Rates Unchanged

 

[waltky]

Possible Fed interest rate hikes, Uncertainty on Trade Tensions...

Fed's Powell Points to Rate Hikes, Uncertainty on Trade Tensions
April 06, 2018 — The Federal Reserve will likely need to keep raising U.S. interest rates to keep inflation under control, Fed Chairman Jerome Powell said, adding that it was too soon to know if rising trade tensions would hit the U.S. economy.

In his first speech on the economic outlook since assuming the helm at the U.S. central bank on February 5, Powell said Friday the labor market appeared close to full employment and that inflation was poised to rise toward the Fed's 2 percent objective in the coming months. "As long as the economy continues broadly on its current path, further gradual increases in the federal funds rate will best promote these goals," Powell said at an event in Chicago. Powell said the risks to the U.S. economic outlook appeared "roughly balanced."

Federal Reserve Chairman Jerome Powell's speech at The Economic Club of Chicago, appears on a screen on the floor of the New York Stock Exchange​

In his speech, he made no mention of rising trade tensions between Washington and Beijing in which each government is threatening to hike tariffs on tens of billions of dollars in bilateral trade. Pressed about the issue after his speech, Powell told a business luncheon it was not clear whether the threatened tariffs would actually materialize and how big an effect they might have. "It really is too early to say," he said. The Fed has been slowly raising interest rates since 2015, most recently in March when policymakers signaled they expected to increase borrowing costs two more times in 2018. Prices for interest rate futures have suggested that investors expect the Fed to do just that.

Powell's comments Friday bolstered that view. He said there were many signs that the job market was nearly at full strength and only a few indicators pointed to weakness. "I will be looking for an additional pickup in wage growth as the labor market strengthens further," Powell said. He said Fed policymakers discussed inflation "thoroughly" at their meeting in January and that he believed inflation will be influenced by the labor market over time, meaning that a tight labor market could fuel faster price gains.

Fed's Powell Points to Rate Hikes, Uncertainty on Trade Tensions

 

[waltky]

Trump says not thrilled with Fed's Powell for raising rates...

Exclusive: Trump says not thrilled with Fed's Powell for raising rates

AUGUST 20, 2018 | WASHINGTON (Reuters) - U.S. President Donald Trump said on Monday he was “not thrilled” with Federal Reserve Chairman Jerome Powell for raising interest rates and accused China and Europe of manipulating their respective currencies.

Trump, who spooked investors in July when he criticized the U.S. central bank’s monetary policy tightening, told Reuters in an interview that he believed the Fed should be more accommodating. “I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said in the interview, referring to Powell. Trump nominated Powell last year to replace former Fed Chair Janet Yellen. American presidents have rarely criticized the Fed in recent decades because the independence of the Fed is seen as important for economic stability.



U.S. stocks dipped after Trump’s comments to Reuters and the dollar .DXY edged down against a basket of currencies. Trump, who also criticized the Fed as a candidate for president in 2016, said other countries benefited from their central banks’ moves during tough trade talks, but the United States was not getting support from the Fed. “We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said.



The Fed has raised rates twice this year and is expected to do so again next month. “I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” Trump said. Trump has made reducing U.S. trade deficits a priority and the combination of rising interest rates and a strengthening dollar pose risks for export growth.

Asked on Monday if he believed in the Fed’s independence, Trump said: “I believe in the Fed doing what’s good for the country.”
Powell took over as Fed chief earlier this year. “Am I happy with my choice?” Trump said to Reuters about Powell. “I’ll let you know in seven years.”

Exclusive: Trump says not thrilled with Fed's Powell for raising rates