Federal Reserve chairman defends pace of US interest rate amid Trump’s verbal attacks

US Federal Reserve Chairman Jerome Powell said Friday he believes gradual increases in interest rates remain “appropriate” to keep the economy healthy and thriving, suggesting the central bank will continue with its planned increases despite criticism from President Donald Trump.

Trump on Monday criticised the Fed for hiking rates too quickly, saying he was “not thrilled” with Powell, his own choice to lead the Fed.

Powell did not mention Trump by name on Friday, but the Fed chair made it clear that he and his colleagues on the committee that decides interest rates have not changed their minds on what the best course of action is for the US economy. The Fed is independent, and while the chairman is nominated by the president and confirmed by the Senate, the president has no direct control over the central bank’s actions.

“If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate is likely to be appropriate,” Powell said here at the central bankers’ annual gathering, which is organised by the Federal Reserve Bank of Kansas City.

Powell characterised the US economy as very healthy and said the Fed expects growth and hiring to continue.

“The economy is strong. Inflation is near our 2 per cent objective, and most people who want a job are finding one,” Powell said. “There is good reason to suspect that this strong performance will continue.”