Trump attacks Fed on eve of policy meeting

"It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike", EFE news quoted Trump as saying in a tweet.

Fed officials will conclude a two-day meeting Wednesday, and Wall Street traders predict almost an 80 percent chance the Fed raises rates a quarter point this week, setting them at a range of 2.25 percent to 2.5 percent. The dot plot, updated quarterly, displays the anonymous projections of individual Fed officials for the path of their benchmark rate as well as for inflation and economic growth. A slowing economy - or a recession - could damage Trump's re-election efforts in 2020. Some economic indicators-including USA economic growth and employment-are healthy and tilt the scales towards a rate increase. The Dow Jones Industrial Average of stocks fell more than 500 points on Monday and is down 12 per cent since early October.

Separately, Trump economic adviser Peter Navarro described the Fed as the biggest threat to USA economic growth.

It is highly unusual for a president to be publicly vocal in any criticism of the Fed, though many presidents have complained privately about higher interest rates. "Given recent economic and market developments, the Fed should cease-for now-its double-barreled blitz of higher interest rates and tighter liquidity".

"Our gradual pace of raising interest rates has been an exercise in balancing risks". Their recommendation: cancel the December rate hike, as others have suggested.

In a tweet, President Trump advised the Fed to "feel the market" and not to "just go by meaningless numbers".

Lawrence White, an economics professor at New York University's Stern School, said he expects the Fed to remain mindful of the mistakes of the 1970s, when officials allowed inflation to erupt, requiring sharply higher interest rates and a painful recession to root out.

With inflation meeting the Fed's 2 per cent target and few policymakers anxious about it overshooting, Navarro suggested the central bank is raising rates for the wrong reason.

"The criticism by the administration of the Fed is not going to stop, and it's likely to intensify", said Joshua Feinman, global chief economist at DWS in NY and a former Fed staff economist.

Trump, who has made the economy a key part of his political platform, has repeatedly criticized the Fed and its chairman, Jerome Powell.

"China, the European Union and others have been manipulating their currencies and interest rates lower, while the United States is raising rates while the dollars gets stronger and stronger with each passing day-taking away our big competitive edge", Trump said in a Twitter post on July 20.