President Donald Trump's repeated complaints about rising interest rates appear to be having no impact on policy so far.
The minutes of the Federal Reserve meeting on September 25-26 suggested that FOMC board members were of the view that more interest rate increases were on the cards. "They could probably raise rates faster, which is not what he is exactly looking for". With a low unemployment rate and strong economic growth, the Fed can make a strong case for raising rates.
As opposed to a mild brake on the economy, Bullard argued that rates that high "would be moving quite a ways into restrictive territory".
He also criticized the Fed last week after the stock market's selloff, telling reporters the central bank had "gone crazy" and is "out of control".
In addition, business investment climbed 10 per cent in the first half of the year, which suggests productivity will rise, allowing the economy to continue to grow without fueling inflation and while attracting more workers into the labor pool, he told the Economic Club of NY.
The Federal Reserve's current monetary policy path would raise the risks of recession in an economy where recent, unexpectedly strong growth may start to taper anyway, St. Louis Fed President James Bullard said on Thursday.
They are carefully trying to keep the economy on even keel all while keeping a watchful eye on possible inflation risks that might be brought about after last year's injection of fiscal stimulus through tax cuts and a massive spending bill.
The market has priced in another hike in December, with three more increases expected in 2019, which would take rates in the U.S. to a level slightly above neutral. "I'm not happy with what he's doing because it's going too fast", Trump said.
Except for his ability to appoint its Chair, Trump has no say over the Fed's day-to-day operations, and, he said, he does not even speak with Powell because of the Fed's need to remain politically neutral.
When asked if he thought the President should be weighing in on the agencies, he replied: "I don't think he should be making comments on any federal agency".
"I think the Fed has gone insane", he said. Other officials said they would oppose a restrictive rate policy without clear signs of an overheating economy and rising inflation.
Every Federal Reserve policymaker backed raising interest rates last month in a meeting where they also generally agreed borrowing costs were set to rise further, according to the minutes from the meeting.
President Trump has been critical of the increases, saying they may slow business growth. The Fed has always been seen as needing to remain free of political pressure to properly manage rates, and presidents have generally respected that independence, especially publicly.