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Despite Trump criticism, Fed policymakers see need for more rate hikes

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Despite sharp criticism from U.S. President Donald Trump for raising interest rates, Federal Reserve policymakers remain generally united on the need to raise borrowing costs further, according to minutes from their most recent policy meeting.

Every policymaker backed the Fed’s September rate increase, according to the minutes of the Sept. 25-26 meeting, published Wednesday. The display of unanimity could bolster expectations the central bank will raise rates a fourth time this year in December.

Participants in the FOMC rate-setting committee “generally anticipated that further gradual increases” in short-term borrowing costs would be consistent with the kind of continued economic expansion, labor market strength, and firm inflation that most anticipated, the minutes showed.

“This gradual approach would balance the risk of tightening monetary policy too quickly, which could lead to an abrupt slowing in the economy and inflation moving below the Committee’s objective, against the risk of moving too slowly, which could engender inflation persistently above the objective and possibly contribute to a buildup of financial imbalances,” the minutes said.

U.S. stock prices recovered some earlier losses but were still down for the day following the minutes. U.S. Treasury yields were little changed. Trump has accused the Fed of endangering the country’s economic health, this week saying the central bank is his “biggest threat” and last week calling the central bank “crazy,” “loco,” “ridiculous,” and “too cute.”

Though the minutes did not refer to any of Trump’s criticism, its message of further rate increases suggests that policymakers are not fazed by it.

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“For now, the Fed has made it clear that they are focused on their agenda despite rising Presidential pressure on their rate decisions,” said Mike Loewengart, vice president of investment strategy at E*Trade.

The minutes did suggest that the committee remains split on how much further to raise rates next year, with a few participants expecting rates would need to rise enough to modestly restrain economic growth, even as two others “indicated that they would not favor adopting a restrictive policy stance in the absence of clear signs of an overheating economy and rising inflation.”

Compared to the minutes of Fed’s previous meeting held in August, the September minutes appeared to show less discussion around the prospects that a recession might be lurking around the corner. Rather, some of the central bankers appeared to see some indications of a stronger U.S. economy.

“Almost all participants saw little change in their assessment of the economic outlook, although a few of them judged that recent data pointed to a pace of economic activity that was stronger than they expected earlier in the year,” according to the minutes.

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Still, policymakers noted that the relative weakness of the international economy could create “potential for further strengthening of the U.S. dollar,” a factor that could weigh on U.S. exports.

They also noted that some businesses said they were investing less in the energy sector due to the imposition of import tariffs on steel and aluminum, part of an array of trade policy conflicts the Trump administration has pursued.

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.

The Fed has been raising interest rates since 2015 and after the rate hike last month it stopped describing the stance of monetary policy as “accommodative,” meaning that it no longer thought the level of interest rates was stimulating the economy.

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The minutes showed that “almost all” policymakers agreed it was time to stop saying they were stimulating the economy.

Reporting by Jason Lange and Pete Schroeder; writing by Ann Saphir; Editing by Andrea Ricci

Report typos and corrections to [email protected].
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Fox host: ‘Ecstatic’ Pompeo and Bolton having ‘tickle parties’ as they push Trump into conflict with Iran

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Fox News host Lisa Kennedy Montgomery on Tuesday worried that President Donald Trump's top advisors were pushing him towards a war with Iran.

"I think Mike Pompeo and John Bolton are jumping around like a couple of 11-year-olds at a sleepover," she remarked during a panel discussion on "Outnumbered."

"They're having pillow fights and tickle parties because they are ecstatic at the thought of an increased military presence near Iran. That's very unfortunate, because the problem isn’t directly challenging Iran with some of their misbehavior. The problem is getting into another Afghanistan and another protracted military campaign --"

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‘This should scare the hell out of you’: Photo of Greenland sled dog teams walking on melted water

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In yet the latest shocking image depicting just how fast the world's natural systems are changing due to the global climate emergency, a photograph showing a vast expanse of melted Arctic ice in Greenland—one in which a pair of sled dog teams appear to be walking on water—has gone viral.

The photo, taken by researcher Steffen Olsen from the Centre for Ocean and Ice at the Danish Meteorological Institute just last week, showed two teams of dogs pulling sleds designed for ice and snow through ankle-deep water atop a melted ice sheet in the country's Inglefield Bredning fjord.

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Trump says attacks on oil tankers ‘very minor’

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President Donald Trump downplayed recent attacks on oil tankers in the Gulf of Oman that Washington blames on Iran and noted that the United States is less dependent on energy supplies from the region.

"So far, it?s been very minor," Trump told Time magazine in an interview released Monday.

However, Trump said he accepts the US intelligence assessment that Iran is behind the explosions that damaged the hulls of Norwegian and Japanese tankers.

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