Trump calls US Federal Reserve his 'biggest threat'

Last week US President Donald Trump called the Fed

EVAN VUCCI APLast week US President Donald Trump called the Fed"out of control

This would move USA interest rates slightly above what policymakers say is "neutral" - that is, neither slowing nor speeding the economy - but some participants said the Fed may need to go even further than that.

Despite fierce blowback from President Trump, the Federal Reserve's policymakers unanimously agree they should keep hiking interest rates to cap inflation. Officials have penciled in one more rate increase this year, and three in 2019.

USA stock markets, which had largely expected a "steady as you go" statement, moved slightly higher but remained loss-making after the update, which stressed a continuation of the Fed's "gradual" approach to rate rise policy.

In Tuesday's interview, though, Trump said of his other nominees for the Fed, "I put a couple of other people there I'm not so happy with too but for the most part I'm very happy with people".

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Still, policymakers noted that the relative weakness of the worldwide economy could create "potential for further strengthening of the US dollar", a factor that could weigh on USA exports.

Further rate hikes "would most likely be consistent" with the current period of firming inflation and historically low unemployment, according to the minutes released Wednesday.

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.

The central bank continues to have a bullish outlook on the US economy, and praised "robust increases" in household income, the minutes show.

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Meanwhile, the Fed took notice of clouds forming on the horizon.

But others argued against stronger tightening of monetary policy without "clear signs" the economy is running hot.

Some investors say that, after years of easy money, pockets of risk have built up throughout the global economy - raising the chances that a bubble could burst or banks could see significant defaults on debt as borrowing costs begin to increase.

Washington has slapped punishing tariffs on about half of all China's goods exports to the United States, with talks to resolve the matter at an apparent impasse. Trump has previously called Fed policies "crazy".

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Wall Street, which had struggled through much of the day, closed slightly lower, with stocks paring losses after the minutes' release.

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