Central bank is United States economy’s ‘only problem’

Jerome Powell chairman of the Federal Reserve

Jerome Powell chairman of the Federal Reserve

Markets were already facing their worst month in a decade over fears about a US trade war with China, a slowing global economy and chaos in the Trump White House. The S&P 500 also lost 7 percent for the week and is now down 17.8 percent from its record reached earlier in the year.

Economists at Goldman Sachs said the economic hit from this closure would be smaller than previous shutdowns because funding had already been approved for agencies such as the Defense Department.

He said the executives assured him their banks are healthy and have "ample liquidity" to lend to consumers and businesses. Treasury Secretary Steven Mnuchin was to host the call with the president's Working Group on Financial Markets, known colloquially as the "Plunge Protection team".

President Donald Trump on Monday renewed his verbal assault on the Federal Reserve, blaming the central bank for mounting fears over the United States economy and comparing it to a blundering golfer.

A Treasury spokesman said Mnuchin initiated the individual calls with the six bankers because he felt that having conversations with major market participants, as well as holding the Working Group call, was prudent given considerable market volatility.

He suggested the "reality TV politics" seen in the USA under Trump's presidency had led to increased political scrutiny of the Fed system, increasing the possibility of the Fed being used as an effective "scapegoat" if economic growth slows.

Miley Cyrus and Liam Hemsworth are married
Meanwhile, in another snapshot, Hemsworth holds Cyrus in his arms, showing off what appears to be a wedding band on his left hand. Hemsworth is known for his work in the Hunger Games franchise, as well as Independence Day: Resurgence , and The Muppets .

Trump's attacks are widely seen as an intrusion on the political independence of the Fed, which exists to determine the flow of money based off economic data on employment and inflation. Stocks are also on track for their worst December since 1931, during the depths of the Great Depression.

Speculation about the fate of Trump's appointed Fed chairman, Jerome Powell, has swirled after Bloomberg News reported that Trump discussed firing Powell after this past week's rate increase.

"If Trump tries to remove Powell, it could throw the financial markets into deep chaos that makes the current market turmoil look tame", said a note from Oxford Economics. Trump has voiced his anger over the Fed's decision to raise its key short-term rate four times this year. "We're no more happier than anybody else over the performance of the stock market for the last month". Seasonally, this is usually a positive, or at least benign, time for the markets.

However, trading volumes were muted, with markets closing at 1 p.m. ET (1800 GMT) ahead of the Christmas holiday and by midmorning the major averages were well off their lows. The exchange is closed on Tuesday for Christmas day. Wednesday through Friday are normal trading days.

This article is for general information purposes only. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. You could lose all of your deposited funds. "We are seeing stress in the credit markets and the commodity markets, signaling that the Fed might have been naive in believing after several years of abnormally easy monetary policy, that they could reverse or normalize policy in just a few years". He holds a BA in Economics from Rutgers University.

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