Photo: “This is not in any way the president trying to intervene in the currency markets,” US Treasury Secretary Steven Mnuchin told reporters ahead of the two-day Group of 20 summit for finance ministers and central bankers in Buenos Aires
(STR) | ©AFP
Buenos Aires (AFP) – US President Donald Trump has no intention of putting pressure on the Federal Reserve despite criticizing interest rate hikes, Treasury Secretary Steven Mnuchin said on Saturday.
Trump sparked concerns over Fed independence after breaking with long-established executive branch practice of not commenting on the US central banking system.
“This is not in any way the president trying to intervene in the currency markets,” Mnuchin told reporters ahead of the two-day Group of 20 summit for finance ministers and central bankers in Buenos Aires.
“The president has made it very clear to me that he supports the Fed’s independence.”
In an interview aired by US cable television station CNBC on Thursday, Trump had said “I’m not thrilled” about the Fed’s interest rate increases.
“Because we go up and every time you go up they want to raise rates again,” he added.
“I’m not happy about it. But at the same time I’m letting them do what they feel is best.”
Analysts said that quite apart from bringing into question the independence of the Fed, Trump’s comments reinforced the widely-held belief that he sees a strong dollar as a disadvantage to the US economy.
But Mnuchin distanced himself from that position.
“Longer term, a strong dollar is both in the interest of the United States and is also the result of the United States being an extraordinary economy both in terms of growth and investment,” Mnuchin said.
“To the extent the president makes certain comments, I don’t think that’s in any way trying to interfere or intervene with the actual market.”
However, he baulked at suggestions Trump had erred in speaking out against the rates rise, insisting it was normal for someone from the president’s background to simply take an interest in such matters.
“I don’t think it was a mistake. I can’t comment on why he did it,” said Mnuchin.
“Being a real estate person, real estate people obviously follow interest rates.
“I want to assure you this was not intended to put pressure on the Fed or jeopardize the Fed’s independence.”
However, Trump’s comments may have had the desired effect as the dollar slid against the euro and pound on Friday.
His attacks on China and the European Union, whom he accuses of deliberately keeping their currencies low, sparked fears of a potential currency war in addition to a trade conflict.
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