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Trump urges US Fed to forgo another rate hike as policy meeting begins

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Trump urges US Fed to forgo another rate hike as policy meeting begins
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Washington: As the Federal Reserve starts its two-day policy meeting on Tuesday, US President Donald Trump again urged the central bank to refrain from further hiking interest rates, warning it to avoid making "yet another mistake".

"Feel the market, don't just go by meaningless numbers," Trump tweeted on early Tuesday. "I hope the people over at the Fed will read today's Wall Street Journal Editorial before they make yet another mistake. Also, don't let the market become any more illiquid than it already is."

Trump was referring to an article titled "Time for a Fed Pause" published by the WSJ editorial board. It argued that Fed Chairman Jerome Powell should "ignore the politics, inside and outside the Fed, and follow the signals that suggest a prudent pause in raising rates."

The President's fresh criticism came just one day after he blasted the Fed for continuing to raise interest rates, Xinhua news agency reported.

He said on Twitter on Monday it is "incredible" that the Fed is considering another interest rate hike given the current economic situation.

The US President has repeatedly exerted pressure on the Fed to hold off on rate hikes, saying the hikes will impede economic progress. In an earlier tweet in July, Trump said, "the US should not be penalised because we are doing so well. Tightening now hurts all that we have done".

In an earlier report, CNBC had called Trump's Fed criticism "nearly without precedent" in the US history, noting that almost all of Trump's predecessors "steered clear of" Fed critiques to make sure that interest rates were set to work best for the economy.

The Fed has raised its benchmark interest rate three times this year. It is poised to raise rates again at its ongoing policy meeting, according to the minutes of its most recent meeting released last month.

Powell said in late November that interest rates were "just below" the broad range of estimates of the level that would be neutral for the economy.

Market participants interpreted that as a dovish signal for future rate hikes, compared with Powell's previous remarks in early October that rates were "a long way" from neutral, a level neither stimulative nor restrictive to the economy.

But some Wall Street economists and analysts said that they did not see a major shift in Fed's tightening monetary policy.

Almost all 60 economists polled by the WSJ earlier this month estimated that the Fed would raise rates again this week.

They also expected the central bank will raise rates twice next year, a little bit less than the three times they expected when surveyed last month.

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